Blowing Bubbles

by: Joshua Gamen

WOW!

Have you seen the price of gold or silver lately? If this is not something you track, change that. Here is why: As gold and silver go up in value, the cash in your wallet goes down in value. Literally speaking, the value is transferring from the paper dollar to precious medals. And FAST!

Gold went up roughly $60 in the month of September. As of today, in the past year gold has gone up $300. In the last 2 years it has gone up roughly $430.  PAST 5 YEARS = up $845 dollars, nearly tripling it’s value in dollars.

In October 2005, gold was worth a spot price of $466 dollars. Right now, I am currently looking at the up to minute price of gold at $1,314. Gold has nearly tripled in value. Conversely, the dollar is worth roughly 1/3 of what it used to be worth versus gold.

PARADIGM SHIFT

At first it is a bit tricky to think about the economics of financial value. But let me attempt to break it down for you.

Everything has value. A gallon of milk is worth something, a question answered is worth something, gold is worth something, a stake in something is worth something, clothes, automobiles, paper, everything has a value. Part of the reason we are in the mess we are in right now economically, both nationally and globally, is that the government has manipulated the value of the US dollar so that it had more value than it should.

This started when President Nixon took the dollar off of the Gold standard in 1971, in an attempt to CREATE more money for circulation to make everybody do and have more, and thereby get people doing more and making more happen(a good economy). The US dollar is the reserve currency for the world, and so as it corrects itself to being back to what it was originally worth(about the same as a napkin), the world suffers economically.

Going back to the beginning of time, gold and silver have always been used as money. Every civilization that has ever printed or made some kind of currency, and not had anything tangible backing that currency, has ended up with a worthless currency. Currency is only worth as much as people think it is worth. If people don’t think paper bills will be worth as much as other items in compared to trading(ie: gold, silver, diamonds, oil, clothes), then paper bills will become worth less and less. Google: Hyperinflation, Germany.

VALUE

Value is always value, and it shifts to things of which men(and ladies 😉 perceive to have it. 5 Years ago real estate was believed to have a lot of value. The thing is, a house is a house just like it was 5 years ago. The difference is 5 years ago people thought that a house had a high amount of financial value strung to it, now people are seeing it for what it is, a shelter from the weather, warmth, etc.

For most of our known lives, we have thought of the US dollar to carry extreme value. I was in my early 20’s before I every grasped the concept of currency as opposed to money.

MY TAKE

The dollar is crashing, hard and fast! Since the early 70’s, the government has been printing more and more money, in an attempt to keep everyone engaged in more commerce. As the government prints more money, the money in circulation is worth less. The government is now pumping more US dollars into the economy than ever before, and at a more rapid pace than ever before as well! US trade is down, we export significantly less than we import. So where is our value? It’s leaving fast! The good news is now is the time to position yourself to get as much things that have value to you as possible, with a declining dollar. If you can invest in a few pieces of gold or silver here or there, do it. You will get more and more for your gold and silver in the future.

The population is gradually having a paradigm shift themselves, from value being in the dollar, to value being in precious medals. As the people catch on to the idea that their money(US currency) is becoming worth less and less, they will flock to precious medals in an attempt to keep any tangible belongings they have.

The currency bubble that has been inflated for the past 4 decades is popping fast, while the precious medals bubble is just blowing up. Expect gold and silver to rapidly gain against the dollar in the next couple years, as the value of the slutty dollar shrinks, and the value of real estate continues to fall do to the number of bad mortgages adjusting, and rapidly increasing payments along with foreclosures.

Most importantly, get and stay financially educated. Knowledge is the new money 🙂

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