The Worthless Dollar
Since 1913, 97% of the US dollar’s purchasing power has been in decline. In fact, all fiat currencies have been gradually losing purchasing power due to inflation. Inflation is a concept that is taught in school and although people can recite to you the definition of inflation, I don’t think the masses truly understand the effects inflation has on our economy and who holds ultimate power over our dollar. This brings us to our next point – fiat currencies lose purchasing power over time. This differs from REAL money, which is gold and silver, which are limited commodities and are not susceptible to inflation as a result. Gold and silver have maintained their purchasing power over time. You can observe this on a chart:
As you can see, the US dollar has lost nearly all of its’ purchasing power over the last 100 years, while gold has offset the loss of purchasing power by these currencies. Currencies are susceptible to inflation because they can be printed infinitely, an action we are seeing today done by our governments and central banks. Gold and silver are limited resource commodities which is what contributes to their stability as a form of money.
One example where a country’s fiat currency is considered worthless is in Venezuela. Venezuela is presently experiencing a hyper-inflation economy rendering their currency, the bolivar, to become worthless. It costs millions of Bolivars just to buy one cup of coffee. Today, 1 Bolivar = 0.0000040230 US Dollars – that’s right, it is worth less than one cent! Presently, it would take over 250,000 Bolivars to equate to 1.00 US Dollar. Today, it would cost 318,543,376 Bolivars to buy a single ounce of gold at today’s price of $1,298.20 USD per ounce! Surely, you can see how the cost of protecting one’s wealth is out of reach to most Venezuelan people during this economic crisis. The time to protect oneself from such a crisis is BEFORE it happens! You may be thinking that this is an isolated case, but it is not. Historically, this has happened to every fiat currency that has ever existed! Gold and silver are assets that have saved lives by preserving wealth during times like this.
Most of us have been taught to save money, but ask yourself, why would you want to save something that depreciates in value? Here is a better idea – take a portion of those depreciating dollars from your account and buy gold and silver and make it a true savings account! Gold and silver have never gone to the value of $0.00. The same cannot be said about fiat currencies – all fiat currencies have failed historically!
Funds that you deposit into any account held by a bank, such as a chequing or savings account, becomes the bank’s credit. If the bank is unable to pay you back, there is generally little consequence for them as they can legally be bailed out. In order for the banks to print money, there must be a borrower. Did you know that for every dollar you deposit, the banks can legally print on average, 10.00? Think about that, you deposit 100.00 into your account and the banks can print 1,000.00 out of thin air. This is what is known as ‘fractional reserve banking’ and is how most currency is created today! Once new currency is created, the banks use those funds for loans, and investment in the stock market. The riskiest thing you can do is hoard cash because it is designed to fail by deprecating over time and if you store them with a bank, there is no guarantee that the bank will be able to give your funds back to you!
I urge you to consider owning some real money, which is something the dollar will never be. It’s not too late to start investing in gold and silver, especially while they are affordable to buy. Walking into a bank to deposit your money is like waking into a casino where the house always wins!
By Shawn Sklar – Bullion Dealer
– Written on January 2, 2019
1 (2018). “Fiat Franklin” D. Roosevelt Signed Gold Seizure Order In 1933, Purchasing Power of US Dollar Destroyed (But Gold Prices Rise). The Wall Street Examiner. Retrieved from: https://wallstreetexaminer.com/2018/09/fiat-franklin-d-roosevelt-signed-gold-seizure-order-in-1933-purchasing-power-of-us-dollar-destroyed-but-gold-prices-rise/