It’s all over the internet, and even some news stories may make one think that the unthinkable could happen. A collapse of the dollar, or even the entire monetary system of the world. It isn’t a difficult thing to imagine, nor difficult to see why it could happen, I admit. After all, every single government on earth is printing their currencies like there is no tomorrow, and politicians everywhere, are so intent on re-election, that they are spending money as fast as it can be printed; usually twice as fast as taxes bring it in, which, according to any dictionary definition, is inflation. Hyper inflation soon? Many banks are far from healthy. Do I think that the buck will collapse? No, but lots of people do, and I can’t blame them. It would be history repeating itself, and several times at that. Venezuela’s currency will surely collapse, as they are having rampant inflation, almost as Germans did after WW I. Japan’s yen is really shaky, and Argentina’s has gone the way of all flesh a couple of times. Half of the euro nations are in pretty bad shape also. It has happed in America three times already, as I have written about before.
Let’s suppose the calamity howlers are correct. Let’s imagine that suddenly, the dollar was devalued by 50%. I have no idea of how that could happen, in spite of reading “Currency Wars.” But, let’s assume the worst, and everyone wakes up one morning, and their dollars are worth fifty cents. This means that prices would double, since the dollars you buy things with, would be worth half what they were worth when you went to bed the night before. It always seems to happen at night. Government could pay its debts with half value dollars, which would be nice for them. All sorts of riots and civil unrest could be expected, which would avail the rioters exactly nothing. Your currency would be worth half, and prices would be double, and it would be just that simple. Maybe the dollar would be devalued by 25%, and not 50%. The same results. Prices would go up 25%, and your dollar would be worth 25% less. With devaluation, be it intentional, or the result of normal government shenanigans, the dollar might go down a few percentage points a year, as it has been doing since Roosevelt’s time. The buck has already lost 98% of its purchasing power of 75 years ago.
Think about a 50% or 25% sudden devaluation, and what it would mean to you and society in general. Wow! Savings accounts worth 25% or 50% less, even though the number of dollars were the same. They would buy less. They’d look the same, with the various Presidents’ heads on them, and would not be counterfeit at all. Just worth 25% 0r 50% less. The same, exact $20, $50, and $100 bills, suddenly buying less, and prices higher by the amount of devaluation. Calamity indeed. People with no savings or extra dollars, would notice that their salaries didn’t go up instantly, and their paychecks would buy 25% or 50% less. Starvation would rear its ugly head. Gas prices would be up, and people might not have enough devalued dollars to feed their cars so they could travel. Clothes, food, utilities would be instantly up in price.
Gold and silver? They’d go up 25% or 50% also, along with the rest of consumables and tangibles. However, suppose you had your savings or surplus assets in gold and silver, rather than dollars, as I have been preaching for decades? You’d be just fine! Why? Because gold and silver are real money, and can’t be produced with a printing press. It would cost 25% or 50% more to mine and produce gold and silver, but they could also be sold for that much more also, so your savings would have been secure. You might say that you bought your gold and silver at a higher price that they were when the devaluation came, but so what? You would be ahead, even if gold were two or three hundred dollars higher. You’d still be ahead. Not only that, but with currency devaluation, gold and silver would be instantly obvious as real money, and the demand for them would probably make them go up even higher, so much demand would there be for them. By having savings in gold and silver, if a devaluation came, you would be in ’hog heaven.”
I recently talked to the wife of a client, who told me her husband died suddenly of heart failure at age 72, with no history or warning of heart failure.. He had told her that he had all their money in gold and silver, bought from Colorado Gold. She found my card, and called me. He left no insurance, but she has his Social Security, and for the time at lest, she’s fine, with no debts of any kind. She wanted to know what to do if she needed money, and of course the answer was easy. “Just call me, tell me what you want to sell, and I’ll sell it for you, no charge, and you ship it. When it gets there, I’ll send you a check.” She was very comforted by the simplicity and convenience of that, and I don’t blame her.
How could there be a better way to save, than with real money? Why do you think that throughout history, be it Egypt, Biblical times, or any other civilization, gold and silver were either the ultimate or common money? Do you think Abraham, Isaac, or Jacob had paper money? Nope. The first coins were silver, and made by the Egyptians. I have a Roman silver denarius made in 50 AD. I also have a $100 trillion dollar Zimbabwe paper note, and a $500 trillion Yugoslav dinar note, both of which are worthless. I also have a few U.S. Confederate notes, which, aside from their being collectible, are worthless also..
One can never predict what will happen, even a few minutes from now, and that’s why people have insurance. I thought the Broncos were going to win! Gold and silver are the best of insurance, and have no premiums to pay each month. Obtaining gold and silver is investing in real, historic wealth which requires no government approval or stamp of authenticity. An insurance policy against devaluation or death, with no premiums to pay every month or year. Unlike term insurance, there is no time when they will expire. My wife gave me a splendid metal plaque which says, “Invest In Precious Metals! Buy Lead. Support The Second Amendment.” I agree to that also!
P.S. Don’t mess with Texas. I love that phrase, and also ’Aloha’ from my Hawaiian clients.