Mar 24

Gold is money.

Gold is and has been globally accepted in more than 194 countries for centuries, thus establishing itself as a form of currency.

In recent times, the importance of relocating assets into a more reliable form of investment with yielding results has been lost. Our current world banking system was created when the gold trade began – the gold would be deposited into banks and proof of the deposit was obtained in the form of a receipt in the amount of the stock.

These receipts were the first unofficial banknotes of the world. The trading of bank notes was thus born, and was quickly recognized by banks. So much so, that gold-deposited banknotes were playing an increasingly important role in society, which soon led to the first official notes being deposited with the gold ones.

In today’s modern world, the monetary value of printed currency essentially has no value – meaning it is not backed by gold.

The gold standard corresponded to the beginning of the 20th Century’s 1.504632 gram of gold = $ 1. Due to the compounding effect of the gold standard over the years after World War 1, with the help of President Nixon in 1971, the Gold Standard was abolished completely – which lead to even more shocking results as far as the world economy and the printing of money was concerned.

The Problem is that only a minority of people have learnt from history regarding the relationship between Gold backed currency, Government's international competition with each other (to the point of creating World Wars) and Central Banks.

When greed sets in, The currency is debased by governments which in turn opens the flood gate for incessant and infinite printing of money.

Nations have fallen each every time currency debasing has been introduced and the only ones that appear to be hurt buy all of these leadership shenanigans are the people!

Ultimately, when governments and the bank collude to print money without limitation and restriction (because there is no gold in the vaults to restrict spending) then the wealth of the people will be and has been destroyed.

If one doesn't have a plan to protect their wealth, then all history, quite rightly will just repeat itself all over again!

Top reasons to Buy Gold

1. Gold offers protection against inflation and currency reform.
2. Gold bars are global cash.
3. Gold in a time of crisis is a stable investment.
4. Gold is and will remain unimpaired, as limited resources which are not reproducible.
5. Global demand for gold is higher than its supply.
6. The purchase and sale of investment gold is exempt from VAT.

Gold is security for you and your family. Start protecting your households’ future – sooner is better than later, as the price of gold only increases.

A Perspective View of Government Spending and It's affect on Your Wealth…

So I am going top try and explain the effect of banks and governments continually printing currency that is not backed by anything of substance and that can be measured.

Imagine your own bank account.

Regardless if it has 10 grand or 10p, even if you have an overdraft, you know how much currency you have available to spend.

Now at the beginning of the month, like the majority of people, bills are paid, shopping is done, expenses are taken care off.

Let's say for argument sake, that after everything has been sorted out, there's £350 of disposable income remaining.

What happens at this point?

Ultimately, one is limited to spend based on what is available.

Now if you compare this to a government with a treasury.. they too have a budget and their income would be directly related to the amount of taxes being received, which is a function of how much business

the country's citizens are doing (i.e taxes and duties being paid)

So, if the country has a period where the people are demanding the latest gadget or luxury, which companies have to import

This means that the country as a whole is doing a lot of spending, more than the income it is generating.

the more one spends, the emptier that vault (think your bank account) is.

If the vault is gold and the paper currency printed is backed by Gold, this means that if something is not done, money will run out.. right?

So how can we stop or slow down the spending of the country i.e. it's importing of goods?

Let's make it personal again..

if you know that £350 has to pay for food, lunch, travel, etc, and you have calculated that you only have £20 before pay day..

On the basic you have no other source of income.. one would have to be wise in their spending…

So if your friends call you and ask you to go out to the pub (bar) or movies or something… on the basis that all thatis available is £20, the logical answer would be no! Else you will run out of money

So, looking at the government…

Back to the question… how do they slow down the spending…

the fact of the matter is.. import is high as there is a demand

The greater the demand.. the more the import

what happens when stock runs low?

Distributors, can still deliver the goods, but they are going to have to charge more (supply and demand)

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The government has a choice

  1. Borrow more money to keep the country happy and keep the demand increasing
  2. or they can reduce their spending (less loans i.e. higher interest rates, higher taxes etc) this will reduce import (spending)
    1. The reduced import and hence reduced government spending will drive prices higher as demand is still high (as supply is reducing)
    2. The market will determine exactly how high prices will be (not the government)
  3. The government, can now keep control of their spending and create more opportunities for export of goods and boost trade, jobs, economy etc.

This is what's supposed to happen!

It's no different to Fred, monitoring his outgoings to get him to the end of the month

The Government has a tricky job of keeping the ebb and flow of spending and saving in check, and having Gold as a store of value is a good control on how much spending can continue.

So, if the gold is now removed, and the government can print at leisure, without restriction, what do you think will happen?

If Fred, decided to get a massive overdraft and keeps on spending, what will happen to Fred?

And if you multiply the number of Fred's to a few million people all acting the same way (as they are encouraged to) what then happens to the principle of supply and demand?

Effectively, if there is no gold backing the printing of money (government loans or increase in government deficit) The currency that is being produced, suddenly has nothing to define it's worth or value.

So this is what is now known as inflation.

Demand is soaring (because everyone can afford everything) – we can borrow what we want, who cares about tomorrow?

The more paper in circulation with no gold to back it, the higher and higher demand will rise.

The greater the demand, which at some point will outperform the speed of supply, will cause huge increase in price

But lets think about this….

The price is only high, because someone is willing to pay the price, because they can.

Does it mean that the price reflects true value?

How can it, if there is no measure of what is of value i.e no gold backing the notes being spent and printed?

Here in lies the real issue

Unfortunately…

It's a silent issue, and the masses will not realize there is a problem until the very last minute

The reality will hit the majority like the realization of a thief breaking into a house at night,… with a great big shock and panic!

But there are signs which you can look out for…..

Have you heard of a bubble? It happens every so often in various industries.

There was the Dot Com bubble

The Housing Crash and Global credit Cruch was effectively a bubble bursting in the banking and Lending world and also the housing market globally.

Too much borrowing/ printing is an inflation of the supply of money, as there is nothing of tangible value to sustain or support the equivalent amount of money in circulation.

The biggest challenge for a government/ central bank when things are starting to get out of hand is to maintain the trust of your customers.

  • Governments have to maintain the trust of the countries that buy and sell to them
  • Governments have to encourage the people that everything is ok and they should continue to spend there money (mot save it and hoard it) – This is a very simplified definition of Quantitative easing
  • The people need to be distracted from the real problem at hand, hence the help of the mass media
  • and so the rat race continues

the moment trust is gone, it's over!

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But when people start to realize that a bottle of water is 50% more expensive than it was last year or the cost of a weekly shop is £20 more expensive each week compared to the year before and the year before that…

Then the signs that your ‘fiat currency' is not able to afford the same things in life as it use to…

Too much of anything makes it less valuable or appreciated.

This pain is felt everywhere, even in industry, So if people get scared and start to hoard there money, then a deflation or contraction of the supply takes place.

When all confidence is lost (because simple things like bread and water starts to become over priced as there is no more supply (as the currency is not trusted any more) we hit a real huge problem

No… The knee jerk reaction of Governments and banks is to do what it does best.. print even more money!

And then get it circulated and allow banks to continue to lend so that the system is artificially hung up on a shoe string

How to combat this problem?

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The answer is to find ways and means to protect yourself!

Most people do not think of gold until it's too late.

The majority, which can be recognized through historical observations, operate in a fight or flight mode.

  1. hoarding mentallity
  2. buying everything iun site
  3. getting rid of cash as quickly as possible the more and more worthless it becomes

This behavior has a viscous effect…

The price of goods are driven higher and higher – so inflation gets worse!

Worst case scenario.. it will lead to empty shelves and panic.

But let's not focus on the negatives..

The more subtle signs are what we are currently enduring at present…

To stop a ‘PANIC', the government and the Central bank have to utilize ‘Damage limitation' so the ‘appearance' of a recovery and the mitigation of a deflation leading to a recession needs to be the order of the day.

So say Hello to flooding the system with even more money

Say hello to rising house prices (as a sign of a recovery)

Say hello to super low interest rates (Cheap money) for low rate loans which will promote trade and attract export and promote more employment

All of the above is just driving MORE inflation and the debt/ inflationary time bomb just keeps on ticking.

If it gets out of hand.. (just check the history books) one needs to be prepared.

All of the above are the many reason to buy gold today!

I am talking about real gold bullion

Not necessarily stocks and shares..

Most gurus will tell you to have lots of cash!  No..

You need Gold, something that can be liquidated (realized into money and value) very quickly and can be traded internationally without delays.

Acquiring gold doesn't have to be expensive or complicated. You can start right where you are.. even if it's just 1g of gold a week or per month. Exchange your Fiat currency for real Money

Remember – this is NOT an investment strategy

obviously, it goes without saying that I am not NOT giving you financial advice in any way, i am just stating what should be obvious.

The easiest way to get started with acquiring gold is to buy gold bars online.

You can even buy gold coins just get started.

It's possible to get it delivered to you securely and/ or keep it in storage until required

Worth Checking Out

There is one company that I have come across over the last 8 years who have been shouting from the rooftops about the perils of preserving wealth or indeed measuring wealth

by accumulating Fiat Currency.

They promote the exchange of your cash for real money, from gold bars in denominations starting from 1g, 2.5g and 5g

You can even exchange your cash/ currency (they serve over 120 countries presently) for paper backed by gold (the gold bars are attached to the paper note – you have to see it to believe it) called Cash Gold.

All designed to be used as regular currency with security features and the whole shebang!

The name of the company is called Karatbars

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About the Author

Richard Ansah is the Founder of Fiat for Gold and is passionate about helping families and individuals to increase their personal income and wealth through education. Based in London, UK; he's happily married for nearly 20 years to his best friend, they have two beautiful children. Richard is an Expert in Private Trusts, Dealing with Personal Debt and Money Matters

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