Best of the Week
Most Popular
1.Are UK Savings Interest Rates Finally Starting to Rise? Best Cash ISA 2017 - Nadeem_Walayat
2.Inflation Tsunami - Supermarkets, Retail Sector Crisis 2017, EU Suicide and Burning Stocks - Nadeem_Walayat
3.Big Moves in the World Stock Markets - Big Bases - Rambus_Chartology
4.The Next Financial Implosion Is Not Going To Be About The Banks! - Gordon_T_Long
5.Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - Nadeem_Walayat
6.Trump Ramps Up US Military Debt Spending In Preparations for China War - Nadeem_Walayat
7.Watch What Happens When Silver Price Hits $26...  - MoneyMetals
8.Stock Market Fake Risk, Fake Return? Market Crash? - 2nd Mar 17 - Axel_Merk
9.Global Inflation Surges, Central Banks Losing Control and Triggered the Wage Price Spiral? - Nadeem_Walayat
10.Why Gold Will Boom In 2017 - James Burgess
Last 7 days
Political Week Presurres US Stock Market - 25th Mar 17
London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - 25th Mar 17
Will Washington Risk WW3 to Block an Emerging EU-Russia Superstate - 25th Mar 17
Unaccountable Military Industrial Complex Is Destroying America and the Rest Of The World Too - 25th Mar 17
Silver Mining Stock Fundamentals - 24th Mar 17
A Walk Down the Dark Road of Bad Government - 24th Mar 17
Is Stock Market Flash Crash Postponed Until Monday? - 24th Mar 17
Stock Market Bubble and Gold - 24th Mar 17
Maps Of Past Empires That Can Tell Us About The Future - 24th Mar 17
SNP Independent Scotland's Destiny With Economic Catastrophe, the English Subsidy - IndyRef2 - 24th Mar 17
Stock Market VIX Cycles Set To Explode March/April 2017 – Part II - 23rd Mar 17
Is Now a Good Time to Invest in the US Housing Market? - 23rd Mar 17
The Stock Market Is a Present-Day Version of Pavlov’s Dog - 23rd Mar 17
US Budget - There’s Almost Nothing Left To Cut - 23rd Mar 17
Stock Market Upward Reversal Or Just Quick Rebound Before Another Leg Down? - 23rd Mar 17
Trends to Look Out For as a Modern-day Landlord - 23rd Mar 17
Here’s Why Interstate Health Insurance Won’t Fix Obamacare / Trumpcare - 23rd Mar 17
China’s Biggest Limitations Determine the Future of East Asia - 23rd Mar 17
This is About So Much More Than Trump and Brexit - 23rd Mar 17
Trump Stock Market Rally Over? 20% Bear Drop By Mid Summer? - 22nd Mar 17
Trump Added $3 Trillion in Wealth to Stock Market Participants - 22nd Mar 17
What's Next for the US Dollar, Gold and Stocks? - 22nd Mar 17
MSM Bond Market Full Nonsense Mode as ‘Trump Trades’ Unwind on Schedule - 22nd Mar 17
Peak Gold – Biggest Gold Story Not Being Reported - 22nd Mar 17
Return of Sovereign France, Europe’s Changing Landscape - 22nd Mar 17
Trump Stocks Bull Market Rolling Over? You Were Warned! - 22nd Mar 17
Stock Market Charts That Scream “This Is It” - Here’s What to Do - 22nd Mar 17
Raising the Minimum Wage Is a Jobs Killing Move - 22nd Mar 17
Potential Bottoming Patterns in Gold and Silver Precious Metals Stocks Complex... - 22nd Mar 17
UK Stagflation, Soaring Inflation CPI 2.3%, RPI 3.2%, Real 4.4% - 21st Mar 17
The Demise of the Gold and Silver Bull Run is Greatly Exaggerated - 21st Mar 17
USD Decline Continues, Pull SPX Down as well? - 21st Mar 17
Trump Watershed Budget - 21st Mar 17
How do Client Acquisition Offers Affect Businesses? - 21st Mar 17
Physical Metals Demand Plus Manipulation Suits Will Break Paper Market - 20th Mar 17
Stock Market Uncertainty Following Interest Rate Increase - Will Uptrend Continue? - 20th Mar 17
Precious Metals : Who’s in Charge ? - 20th Mar 17
Stock Market Correction Continues - 20th Mar 17
Why The Status Quo Is Under Increasing Attack By 'Populist People Power' - 20th Mar 17
Why the SNP WILL Destroy Scotland, Exit UK Single Market for EU - IndyRef2 - 19th Mar 17
Crypto Craziness: Bitcoin Plunges on Fork Concerns, Steem Skyrockets and Dash Surges Above $100 - 19th Mar 17
What ‘Ice-Nine’ Means for Your Money - 19th Mar 17
Stock Market 4 Year Cycle - 18th Mar 17

Market Oracle FREE Newsletter

Elliott Wave Trading

Top 10 Reasons To Buy Gold and Silver

Commodities / Gold and Silver 2013 Sep 05, 2013 - 07:12 AM GMT

By: hiddensecretsofmoney

Commodities

Mike Maloney writes: As I have said many times before, the economic crisis of 2008 was only a speed bump on the way to the main event.  I believe that before the end of this decade there will be an economic crisis so historic that it will eclipse the crash of 29 and the subsequent great depression.  I also believe it is both unavoidable and inevitable, because it is merely the free market releasing the stored up energy from decades of economic manipulation.  Yes… bad things are going to happen, but it could be the best thing that ever happened to you.


This guide started out as “The Top Ten Reasons TO Buy Gold and Silver” and was originally drafted by some good and well-intentioned employees, but when I read it something just didn’t feel right.  It contained all the usual reasons that any precious metals dealer would point out as to why people should own gold and silver…  they’re the ultimate insurance policy, they’re private, they’re a hedge against inflation, they’re a timeless investment, and so on.  I spent lots of time trying to rewrite them but there was still something wrong.  And then it dawned on me… though they were all good reasons to own gold and silver; they weren’t the reasons that “ I “ buy gold and silver.

So here you go… a countdown of “The Top Ten Reasons That I Buy Gold And Silver.”

10. All World’s Currencies are Fiat Currencies, and Fiat Currencies Always Fail.

99.9% of the world’s population is unaware that we no longer use money… we use “fiat” national currencies.  What is a fiat currency?  Fiat currencies are faith based.  They are national currencies that are not backed by anything of value like gold, instead the government just declares that they have value and, as long as the people keep believing, they accept it… for a while.  But here’s the thing, there have been thousands upon thousands of fiat currencies throughout history, and they have all failed… 100%... no exceptions.

But there is a vast difference this time around.  Since 1971, for the very first time in history, all of the world’s currencies are fiat currencies simultaneously. 

Remember this as we progress through the Top Ten… 

ALL FIAT CURRENCIES FAIL.

9. The Current State of the Global Economy.

In my book, Guide to Investing in Gold and Silver, and in Hidden Secrets of Money, I show how societies have swung back and forth from quality money to quantity currency.  Originally, quantity currency took the form of debased coinage (gold or silver money that has been diluted by adding cheap and abundant base metals such as copper).  Then it took the deceptive form of national currencies that were initially backed by money, IE: claim checks on gold and/or silver. Once these were established, governments then could change the laws, basically making fraud legal, so they could print claim checks on gold that didn’t exist.  The next step was to sever the connection between money and currencies entirely.  

Back when we used real money gold would automatically balance all economies.  When one country experienced an economic boom they would import cheap goods from countries with depressed economies and lower wage rates.  The outflows of gold from the boom country would cause a deflation, cooling the economy, while the countries experiencing gold inflows would boom, causing their labor rates to increase, which in turn would cause the prices of their goods to rise.  This meant that trade imbalances would always automatically rebalance.  Government spending was also constrained.  If a government wanted to spend more than its income (deficit spending) it had to borrow gold from the private sector.  If the government borrowed too much it would cause interest rates to rise, which in turn would slow the economy, which in turn would cause tax revenues to fall, which meant less income for the government, which in turn would cause the government to cut spending.

But the debt based global monetary system has allowed deficit spending, trade imbalances, and bubbles to persist and balloon to levels unprecedented in all of history.  We are in completely uncharted territory.  The credit/debt bubble and the derivatives bubble threaten to take down the world economy.  The only comparison you could make is to take every great bubble in history times one million and have it burst everywhere on the planet simultaneously… It threatens to be a global financial nuclear holocaust the only financial survivors of which will be the owners of gold and silver.

8. Currency Crisis / New World Monetary System.

I am a firm believer that everything happens in waves and cycles.  So when I started writing my book back in 2005 I entered every financial crisis that I could identify into a spreadsheet, starting from the beginning of the USA, looking for a cycle, and something very dramatic stuck out at me.  I had discovered that every 30-40 years the world has an entirely new monetary system.

From that day till now I have been telling as many people as I could that before the end of this decade (before 2020) there will be an emergency meeting of the G-20 finance ministers (or something like that) to hash out a new world monetary system.  It’s normal.  No man made monetary system can possibly account for all of the forces in the free market.  They get old… they develop stress cracks… then they implode.  

We have had four different monetary systems in the past 100-years.  The system we are on today is the U.S. dollar standard.  It is an ageing system that is way overdue for its own demise.  It is now developing stress cracks, and will one day implode.  Like I said, it’s normal.  

But what is different this time around is that the last three transitions were baby-steps from full gold backing, to partial gold backing, to less gold backing, to no gold backing.  In each of these transitions the system we were transitioning from had a component that could never fail… gold.  This time we will be transitioning from a system based on something that always fails… fiat currencies.  The key component to this transition from the U.S. dollar standard to some new standard is of course the U.S. dollar.  By the time the emergency meeting takes place the U.S. dollar will be in the final stages of the terminal condition known as fiat failure.   

But the U.S. dollar represents more than half of the value of all the world’s currency.  A dollar crisis would cast doubts on all fiat currencies, and the cascading effect of loss of faith could cause the rest of them to fall like dominos.  The central bankers will try everything they can think of to keep the fiat game going, but when everything they try fails they’ll look around and say, “What worked before.”  And once again the pendulum will swing back to quality money. 

The only beneficiaries of this event will be gold and silver, and those who own them.

7. Gold and Silver Come with a Central Bank Guarantee.

My book was written from 2005 through 2007.  In it I said there would first be the threat of deflation (this came true in the crisis of 2008) to which Ben Bernanke would overreact with a helicopter drop (this came true with the bailouts and QEs) which would cause an inflation (this came true when the stock markets and real estate reflated.)   Next there will be a real deflation… a contraction of the currency supply.  This will happen when the credit/debt/bond/fiat currency bubble and the derivatives bubble begin to implode.  The reaction of the world’s central banks will be to print until deflation gives way.  I believe this will cause a hyperinflation.  A hyperinflation doesn’t require a nation to print its currency into oblivion… it only requires a loss of faith.

Click below and sign up with HiddenSecretsofMoney.com to read the rest of this article and gain access to the Info Toolkit Essentials:

© 2013 Copyright HiddenSecretsofMoney - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife