| Two types of dollars – which should you own?
 Most people don’t know it but there are two types of dollars. There are nominal dollars and real dollars.
Nominal dollars are the everyday paper dollars that we think of and call money. These dollars change every day (depreciate). The value of these dollars goes down constantly as the money printers continue to debase our currency.
The point is that Americans don’t know the difference between nominal dollars and real dollars. They don’t know that their savings and their retirement are being destroyed, and they are being systematically impoverished by depreciating or debased nominal dollars. If this is not all important, I don’t know what is.
Nominal dollars, or depreciating currency, are destroying America. America is a giant Ponzi scheme and we are locked into an economic death spiral.
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Nominal depreciating paper money dollars are by default headed for the same trash heap as the rest of the unfunded paper money. It has happened throughout history and will happen again.
The few who wake up to the real world begin exchanging their depreciating paper money for gold and silver. They also buy value gold stocks and other stocks that go up as un-backed paper money depreciates.
Most people think that a dollar is a dollar. Not so. Today’s dollars (nominal dollars) are quicksand money that financially destroys all who trust it.
Those unaware of the inflating debasing nature of nominal dollars live in a fickle and imaginary world. They believe all is well and all is safe. They are further deceived by rising stock prices in nominal dollars. One can be up 100 percent in a stock portfolio but still be losing in real dollars — very deceptive! How many investors in Warren Buffet’s famous Berkshire Hathaway realize they have been losing in real dollars for years? I don’t believe they mention this in their sensational annual reports.
Look at the nominal dollars in your pocket. They are nowhere near the value of the dollars you had as a child or that you have under your mattress.
We have had paper money since 1913, and most of that time it was being debased (inflated). Now it’s at a 96 percent loss. Put another way, it now takes more than $25 to buy what $1 would buy in 1913. We are only as rich or as poor as the purchasing power of our money.
Have you ever wondered why banks and politicians love paper money? Because they profit from it!
All modern money is nominal dollars. Look at the money in your pocket or your savings account or your retirement. You are being deceptively impoverished, and the fact that you are unaware of it makes your eventual impoverishment certain. For more study on this subject you should get our “Money Lie/Money Myth” set, taken from information produced by the great monetary realist, Merrill Jenkins Sr., available here.
What can we do? Until there is a change in the monetary regime of the United States, we must get out of U.S. dollars as much as we can. Buy farmland, buy food to store, buy gold and silver. Since we expect inflation (now visible), we also buy non-GMO seeds, fertilizer and pesticides ahead. We fix things that need repair. We eliminate our debts.
In an inflating economy (as we’re seeing) we can have a skyrocketing Dow Jones, but that creates a deceptive loss in nominal dollars. President Donald Trump has been crowing the stock market’s rise under his watch, but it’s all a charade.
Look at the green paper in your pocket, which you think of as money. What is the difference between a one dollar bill and a hundred dollar bill? The difference is in the numbers, not in the paper. These green coupons really are transfer coupons. Yes, they transfer our purchasing power to the money creators. Every dollar printed dilutes all the dollars in circulation. Are you getting the picture? Americans believe that they have trillions of dollars in savings and retirement. But what they really have is only numbers. Modern money is only numbers. It is not substance; it is fiat, which is “money” by decree of “authority.”
Readers often ask what good is gold or silver. There are three basic reasons to purchase gold and silver: as an investment, as a hedge against inflation or for reasons of survival and barter should the entire economic system collapse.
When buying as an investment, you are betting that the price will rise above the price at which it was bought. Since it doesn’t pay dividends, like many stocks do, that is the only way you will see a return on your investment.
With gold and silver in a long-term bear market (because their prices are being manipulated by the banksters through the use of paper gold and silver), you must consider whether you are investing short-term or long-term and whether the price trend will be up or down.
I believe we’re on the cusp of a major uptrend. Oh, there will be some valleys along the way; but because of economic conditions, the trend will be up.
If you are buying as an inflation hedge, you want to watch the value of the dollar. Historically, whenever the value of the dollar has dropped, gold’s value has increased. It also tends to move inversely with the stock market. So, while stocks do well in times of stability and economic growth, gold does better during shaky economic times and falling dollar prices because it has real value.
If you are buying for survival purposes, then you, as do we, expect the worst and believe that because the Fed is printing so many dollars, money will become worthless, a situation that has repeated itself many times over in history.
There will never be a better time than now to buy gold and silver. Silver is currently selling for several dollars less than it takes to mine it and mint it. Plus it has many industrial uses: in photography, technology, medical, defense and electronics. Because of this, there is only about one-sixth the amount of above-ground silver available for use than in 1900. Were silver prices not being manipulated down through the use of “paper” silver, it would easily be several hundred to several thousand dollars per ounce.
Whereas gold and silver always hold their value (more on this next week), all we ever get from our paper money is the promise to pay.
Thomas Jefferson warned of this when he said: “The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals… it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”
Yours for the truth,
Bob Livingston
Editor, The Bob Livingston Letter |
