Financial Combat

We are currently in a time where purchasing and investing in gold coins and bars are something everyone should consider doing. Each month in dealing with the slow economy and the deficits our government is relying on the borrowing of more money and the printing of fiat currency via the Federal Reserve. Money saved becomes devalued as each dollar printed lessens the value of those already in the system, not to mention the lowest interest rates on savings in history.

According to the Federal Reserve the inflation rate has been low and they are planning on attaining increased rates in the future with a target of 2%. They are no longer worried about deflation and plan to increase prices across the board, every year. This is a plan that has been employed for 99 years.

After World WarII an agreement called Bretton Woods was signed making the US Dollar the world’s reserve currency. This makes all international purchases based in dollars. In order to purchase goods like oil other countries must keep dollars in reserve. This means that all countries are not working from a gold standard but rather a dollar standard.

When money from the US is printed it causes inflation to the countries we trade with. The only way our trading partners can maintain stability is if they devalue their money along with us. In order for other countries to safe guard themselves from bombardment of the US dollar, a currency war is taking place (we lessen the value of the dollar and other countries do the same to their currency).

When owning gold, it is soothing to know that as the Federal Reserve continues to go down the road of financial inflation as gold will never have to battle in the currency war.  Gold is not a fiat currency and when the dollar is devalued the value of gold increases. Fiat currency can be printed at any time. In 1971 President Nixon put a stop to the direct convertibility of the US dollar to gold. Gold has always held some sort of value and it is not connected to any encumbrances. This shows that gold is a protection from fiat currency.

It seems as though we are seeing fiat currencies slowly coming to an end, which means that gold will be what rescues us. If you own gold you will be a lot safer than those who don’t own gold. The wealthy people will be the ones that own gold as we begin to see the dollar wear away to nothing.