This is one of my first posts - So pardon me if Ive wandered into a private discussion - but I thought the site was interesting and I could add something to the conversation.
Here is a chart that shows the value of gold from 1971 to 2004 ($45 per ounce to $700)
Here is a chart that shows the value of gold over the last 5 years ($800 per ounce to over $1700 per ounce):
This means that as they print/digitize dollars...they make all the dollars in existence worth
less because they make more of them. If something is in scarce supply, it is more expensive - but when you have too much of something, it's value is diminished.
Rich guys, who have a lot of wealth, look to preserve that wealth in times of instability. They stop investing so much and start buying and holding actual Gold (and silver). There is only so much Gold above ground, so if really rich guys are buying it up - and there is a limited supply of it - then it is getting more expensive.
To give you an analogy - in the 1800's you could walk into any suit maker in America and have them make you a tailored suit. You could pay for that suit with one $20 gold piece. Today 200(+) years later you can walk into any suit maker in America, have them make you a tailored suit, and you could pay for that suit with that SAME $20 gold piece.
...the difference isn't that things have gotten more expensive...it is that we have diminished the value of the dollar so much - that instead of it costing $20 paper dollars to buy a tailored suit...it now costs $1700 paper dollars!
Don't worry about saving dollars, the value is dropping daily. Store up items you need that you can buy today....because in a week, a month, a year...those things will cost MORE...and the dollars you saved will be worth
less than they are today.
And don't buy that thing about interest compounding - there isn't a SINGLE investment you can buy that will generate enough interest to keep pace with the rate of inflation (the difference between the cost of what you bought a year ago versus what it would cost you to buy today).
The value of the thing(s) you bought will be the same - or possibly more - if you bought the right things.
Don't get me wrong, this isn't meant to say
"eat drink and be merry for tomorrow we die"...as long as cash exists, you will need some for basic transactions...just don't think your savings are working for you right now. Some banks have begun the phase of economic meltdown where
you pay
them interest to preserve and protect your deposits...
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