Monday, February 2, 2009

The Collapse of Empire

What does it take for an Empire to collapse?

I'd say that there are several things that could do such a thing, but the one thing we've been doing is spending oodles of money on, well, printing more money. Money that is backed by nothing but a premise which is all but irrelevant now. Look closely at this dollar bill.

The upper left of this bill says, "This note is legal tender for all debts public and private." The key word here is, of course, debt. We all know what debt is, to be sure. What is not known is the original bills used were backed by gold, payable to the the bearer on demand.

In essence, you would take this bill to a bank, and they would render unto you 20 dollars worth of gold coin. The REAL currency of the world. If you have one of these, I'm sure its worth a lot of money. Do what it is intended with this bill. Cash it in to a collector and use the cash to buy gold.

Money is worthless when it is backed by nothing, as I'm sure any German old enough (good luck) to remember the Weimar Republic. Or you could ask anyone from Zimbabwe. The problem is inflation, or hyperinflation in the two cases above.

This poor fool will be able to buy a loaf of bread with all of that money. The really funny thing? That wheelbarrow is worth more than that cash. TaDa! Hyperinflation hard at work. And guess what? we're next. Here's why.

You see that spike at the end of the chart? That's the U.S. printing money like mad. The chart goes back to 1910, and as you can see, we were basically flat-lined until about 1985-87 with the savings and loan debacle. We hit September of last year, and WHAM! Our money base has been thoroughly smitten. And we're still going up. The new 'Stimulus Package' the thieves in Washington are now touting, is nothing but a 'Spending Package' and the only thing it will stimulate is further inflation.

The unfortunate bit about inflation is that the effects aren't felt until the damage is done and forgotten. In inflation, everything gets more valuable except money.

Here's the skinny: You got extra money? Buy things that are worth something. Shoes, clothes, food, beans bullets and band aids. Why? Because it's an actual investment. When you invest in something, you want it to be worth more in the future. Buy a pair of shoes for 50 bucks now, because it will be 100 bucks in the future. Get it? Spending money now will be saving money in the future.

Here's another grand idea. Hit flea markets, yard sales, and thrift stores. Not for the usual. You'll be looking for silver items. a 50 cent silver spoon at goodwill is actually worth about 10-15 bucks, and if money collapses all together, how will you pay for anything? Silver is easier and cheaper to get on a budget than gold... but if you have gold, even jewelry, keep it under a rock somewhere, because it will soon be worth more than all of the cash in your savings account.

And you can take that to the bank.

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