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Since the abolition of the gold standard in 1971, dollars have fallen in value while gold has retained it’s value…See Chart Above
I’m continually hearing people talking about the price of gold and silver in terms of dollars. I’m even guilty myself of getting very excited when I see the prices continue to rise in terms of dollars. But what really needs to be understood in all this is that gold and silver are MONEY not currency, and you can only get value out of them if they can be exchanged for something you need of equal or higher VALUE. It’s not the gold and silver that are rising in VALUE, it’s the dollars that are declining in value compared to other things like MONEY (gold and silver) or lumber, or oil, or gasoline, or bread. That is why the PRICE of lumber, or oil, or gasoline, or bread is rising…because the dollars used to buy them are decreasing in value (purchasing power). If you used gold or silver to buy the same items, the value would not have changed over many hundreds of years. You can still buy the same loaf of bread with the same quantity of gold you can today as you could have in 100 B.C. You see, we can look at a dollar bill and the number on it always stays the same, but why do the prices of things we buy with them go up all of the time. It’s because of the law of supply and demand of dollars themselves. The number on the dollars should be changing over the years not the price on the items we buy. But they don’t do it that way because it would show the declining value of dollars each year. Dollars act the same way in an economy as any other item we can acquire through purchases. Essentially, when you receive dollars you are supposed to have bought them for something of equal or higher value through your labour or when you sell something..that’s how an economy works. Then you take those dollars and exchange them for bread or lumber, etc in the same manner, hopefully for something of equal or lesser value. But dollars do not truly represent an item that remains relatively constant in value compared to the other things we need in life to survive.
Inflation of the money supply, or creating dollars out of thin air backed by nothing of substance drives their value further and further down. They should not even HAVE value because all they are is little pieces of paper that represent nohting but debt in an economy. These little pieces of paper once stood for something. They were notes describing value of gold in a vault that could be exchanged for that gold when wanted. The gold represented something tangible that could be exchanged for stuff like lumber, oil or bread. In 1971, the US fell short and couldn’t pay the bills while many other countries were selling their gld backed dollars and taking delivery of the gold. This almost drove the US into the ground…so President Nixon closed the gold window and converted the economic to a ‘Fiat’ system. That meant dollars were now simply a promise to pay…the opposite of money…debt.
Now look at what happened…the chart above explains it all. The value of dollars went to the floor and gold remained equal in value to other tangible things. But you might say, “The gold price keeps going much higher.” That is the disconnect we have in today’s world. Gold is money and dollars are debt. But we can still exchange the real gold for dollars then buy even more tangible items with those dollars. Because gold and silver are not talked about in the mainstream much, and because only 1% of the population might even own some of it, the economy can still float along on this false promise of dollars. The time is coming is to an abrupt end. Once people realize that it’s not dollars we should be pricing everything by, and that we should be comparing prices by other real tangible things, the jig will be up. National debt levels through currency creation and interest work on an exponential function. Once the curve starts to go up in a parabolic fashion, it can’t be switched back. It can be slowed down some which is what central banks and governments around the world are working desperately to do as we speak. But soon it will be an unstoppable hyperinflation beast that will drive the value of dollars to their intrinsic value of zero.
What do you want to be holding when this happens? Dollars which will be be revalued to pennies on the dollar or even collapse all together? Or real things you can hold and use and need to survive. I choose the latter. And the only way you can hold value in MONEY other than things you need in life to live and to thrive are physical gold and silver. It has been that way for thousands of years and will continue to be that way indefinitely. The jig IS up. The false value in dollars that has piggy backed off the initial value of gold in vaults is coming to the forefront. Everyone will soon see the true value of dollars as exponential debt levels cripple the global economy. Gold will be back.. literally back as money and backing any type of note we chose to use as a medium of exchange.
Bring the gold…get some gold…and silver!
Best Regards, Frank
- World Reserve Currency: Why The U.S. Dollar Is Under Attack (etfdailynews.com)
- China, Russia, and the End of the Petrodollar (safehaven.com)
- The History of Money (mint.com)
- Devaluation Coming? (personalliberty.com)