With the country’s high national debt and the fed printing money as fast as they can, it looks like the United States is well on the way towards a major financial crisis. People worldwide are losing their confidence in the dollar as the world’s reserve currency. They can read the same signs we can, and know that if our country continues on the path it’s on, the value of the dollar is going to crash.
We are already seeing some disturbing signs of this.
Chase Bank, the country’s largest, is limiting cash withdrawals and wire transfers. Other banks are starting to follow suit.
Even though there has been a bull market on Wall Street, many people in the know are starting to move their money elsewhere. They’re getting their money out of stocks and into something more secure, while they still can.
Prices are rising all the time, eroding the value of the dollar. While the official inflation rate has held incredibly low, it’s clear to anyone that costs are going up. The only reason that the official inflation rate is staying low is that the government isn’t including food and fuel, the two areas that are increasing in cost the fastest. The true inflation rate is much higher than being reported, running about 10 percent, rather than the 1.5 percent that we’re being told.
More and more, it appears that our country is on the brink of a cliff, waiting for our financial future to fall off the edge. The question isn’t if it will happen, but when it will happen and how bad will it be when it gets here.
The idea of printing money to keep the official inflation rate down and the stock market up isn’t a new one.
The United States isn’t the first country which has tried it.
History shows however, that every country that does it ends up with runaway inflation when they stop. It happened in the Wiemar Republic in Germany, in Argentina and in Greece.
There’s no reason to believe that it won’t happen here in the United States; and when it happens, there will be nobody to bail us out.
We are in a position right now where holding onto money, saving for a rainy day, means we are losing value. If true inflation is 10%, there are very few investments which can keep up with it. Even the best mutual funds barely make 10% per year, meaning that they can just barely keep up with inflation, not help you beat it.
So, what can we do? Where can we put our reserve money, so that we will have it available for retirement or an emergency? How can we save in such a way that we will not be losing money, but rather making money?
The Only Safe Investment
Whenever the value of money goes down, there are a few things that actually go up in value. The most obvious of these is precious metals. Gold has been over $1,500 an ounce for a long time. Silver has been following it. As the value of the dollar goes down, driven there by inflation, we can be sure that the value of gold and silver will go up.
While the dollar is not officially pegged to the value of gold anymore, there is no way to eliminate gold as the standard that all value is compared to. That’s why the value of gold has been going up.
It’s not that gold is really any more valuable than it was before, but rather the dollar is that much less valuable than it was. An ounce of gold is still an ounce of gold. But where you only needed $30 to buy that ounce of gold in 1933, today you need $1,500.
As we enter into the hyper-inflationary cycle that is coming soon, we will see the price of gold and silver skyrocket. It will become the only true measure of value that means anything, as the value of the dollar drops month by month. Those who have gold will come out on top.
Other Things to Consider
Besides precious metals, there are a few other things to consider. The housing market is still very low. It’s probably gone as low as it is going to. Historically, real estate has been the most secure investment there is, other than precious metals. While the housing crash of 2008 has destroyed many people’s life’s savings, it is not likely to be repeated. That crash was a bubble popping and it has left us with no bubble left in property values.
The only problem with buying real estate is that you usually don’t own it; the bank does. You own a mortgage and they hold lien on your property until you pay it off. If you can’t pay it off, you lose the property to the bank.
So the only way to hold property as a hedge against inflation is if you own the property outright. This would be a bad time to buy any property on credit, simply because there is no guarantee that you could pay it off. On the other hand, if you could buy property and pay cash for it, you would have something of value, when the value of the dollar goes down.
One final thing to consider investing in is survival supplies. While that doesn’t really sound like an investment; when hyperinflation hits, those supplies may be hard to come by.
Simple things like food and toilet paper will go up in cost as well, making it harder to buy what you need. That makes it a rather important investment in your family’s future.
This article has been written by Bill White for Survivopedia.
Photo source: 123RF
Edith | March 24, 2014
I agree with investing in survival supplies. Unfortunately, there are a lot of people who like the portability of precious metals and forsake all other things in place of them. These are people who don’t look down the road. You can’t eat gold. You can’t shoot gold. You can’t sleep under, in or on it and stay warm and safe.
If you collect precious metals but don’t collect guns, ammo, reloading components, medical supplies, food and more…you’ve got nothing I want in trade for the supplies I’ve stowed away in the event of an economic collapse.
Mahatma Muhjesbude | February 17, 2016
Edith, your point is correct and i hope more people begin to have that ‘situational awareness’ insight. Just about everybody has the ‘reality’ of buying gold in terms of future survival prepping all wrong. And therefore their perceptions of pragmatic value and applications of it a skewed.
First, of all, once Gold was no longer considered a ‘backing’ value for currency, it no longer became ‘Legal Tender’. I don’t have time now to get into it in depth now but that makes the ‘use’ of it greatly different from cash. So for now ponder/research the following before you go out and buy precious metals, besides the ‘precious metals of guns and ammo. (By the way, since gold, et al is really only just another ‘commodity’, you would have done better the last few years investing in Smith & Wesson stocks or Ruger, or etc.)
Secondly, people who insist that gold always appreciates simply don’t know what they are talking about. So much depends upon the market value of gold that to many it is considered an inferior genera investment, except, of course, to those who make a profit off trying to sellit to people who don’t understand.
Next, just keep in mind that no matter how hard you try, you simply can’t EAT gold, or ‘use’ it for much of anything either.
In a normal economic downslide or upslide, gold is just like any other commodity investment. It’s relative to a lot of things. And can collapse or rise just like anything else the ‘market’ causes.
In an all out apocalypse collapse where the entire old economy no longer exists, then what makes anybody so sure that the value of most anything will remain the same?
Think about that before you ‘unwisely’ invest in your future security.
Linda | March 26, 2014
How long will it be before the gov’t makes it illegal to own gold?
They did it before and with people buying gold from companies selling
gold they will sure know who has it. It will be worthless too, if things
get really bad. A can of soup will be more valuable.
ΜοLon LABE | March 31, 2014
Edith. . . you pretty much said it all.
.22lr is almost worth it’s weight in gold now…and I don’t think it’ll ever go back down to “pre-scare” prices. I think it might even continue to go up. Demand is still increasing seemingly exponentially. It’s one of the few rounds you can’t reload ( not that I’m aware of ) so if you want them you HAVE to buy manufactured rounds. And now, they’re trying to pump them out as fast as they can, reducing quality control standards. Winchester just had a recall and new Remington stuff is pretty sketchy, so CCI & Federal are priceless. I’d rather score some MiniMags over any amount of gold right now.
BTW, did anyone notice that when Midway gets in a batch of bricks (525rds), they limit you to ONE box, but charge you $ 18- $ 20 shipping for that one box? Greedy opportunists like Larry Potterfield will continue to gouge and ripp you off in every sleezy, sneaky way they can, every chance they get. CheaperThanDirt has always done that….100rd C-mags were $225 before the “scare”, AnythingButCheaperThanDirt jacked they’re price right up to $ 700 !!! And they’re shipping rates have ALWAYS been a joke. I quit them long ago. I’m done with Midway now too.
God bless the dealers who don’t take advantage … and ….
ΜΟΛΩΝ ΛΑΒΕ !!!!
Cristian | April 3, 2014
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Kaspar | March 26, 2016
I savor, lead to I found just what I used to be having a
look for. You’ve ended my 4 day lengthy hunt! God Bless you man. Have a nice day.