As the wife of a Certified Public Accountant, I am ashamed that I forgot to add Money to the list of items in my last post Let’s Review! Shall We? I am so ashamed of myself…. And not just cash, either, it’s also wise to add silver and some gold if you can manage it. Why the precious metals? We’ll get to that in a bit.
First, lets take a look at what is probably going on, at least here in the U.S.
In 1944, a conference was held in Bretton Woods, NH. The United States, which owned 2/3 of the world’s gold at the time, insisted that the monetary system created during the 21 days (July 1-22) be tied to gold and was redeemable for gold, called The Gold Standard. Out of this also came the International Monetary Fund among other things. For more information I found: http://www.brettonwoods.org/page/about-the-bretton-woods-institutions . The American Government also took control of the gold reserves of all the countries involved. In an interview I heard with Dr. Paul Craig Roberts, he stated the U.S. started doing questionable things with the gold, like “leasing” it to investors. Instead of answering to those countries or letting them see their gold, in 1971 then President Richard Nixon “closed the gold window” and untied the U.S. dollar from gold. With most of the world’s gold in our vaults the countries had no choice but to do the same. This ushered in the current era of “Fiat Currencies” which are backed by nothing but the “Full Faith and Credit of the Government”. The United States government, did find something to back our currency with, though: Oil. Nicknamed The Petro Dollar. Since countries needed dollars to buy oil and any other commodity in the world, they have to own dollars and buy them from the Federal Reserve Bank (not the US government). The dollar is the World Reserve Currency.
Anyway, this brings us to where we are today. This entire system is now breaking down the Fiat money, Petro Dollar and Reserve Currency status. Let’s face Americans, our government has totally abused the privileges we took upon ourselves. Countries are starting to turn away from the dollar and won’t need to hold them any longer and those trillions of dollars floating around the world are going to be flowing back here. They are, in fact, the Fed has been able to buy them back and prevent them from flooding the economy. So far. The current theory is a part of the Fed called The Exchange Stabilization Fund are the ones who’ve been buying the currency, but I don’t believe there’s really any proof of that….
What that brief summary means is this: those of you who were alive when the Petro Dollar system was started will remember the turmoil, lack of jobs, inflation and general state of misery we went through here. We will look back on that time as the Good Old Days with what’s in store for us in the near future. Don’t believe me? Think about the state of the economy right now, GDP can’t get over 2%, unemployment is actually closer to 25%, retail sales are tanking with stores closing and chains. The loudest and best organized group are Left-wing Marxists who think that all the rest of us are so wrong and so evil that we should be shot. Add into this, all that money coming back which means prices will go up and to start, there will be shortages. If the banking system crashes, even temporarily, your debit cards won’t work and you’ll need cash to buy needed items. If society completely collapses your cash will only be good for so long before people won’t take it any longer. Once they figure out that it’s worthless. This is where having silver and/or gold could come in handy. Better yet, have barter items for this and save the gold for when the new currency is issued. Which will likely happen in the future if the American currency gets hammered too bad. Gold for thousands years has been a store of wealth and money, it is still a way to store your wealth today. Silver is also a way to store your wealth. It doesn’t have to be in coins or bars either, in some countries the women wear gold bracelets and other jewelry as a way to have portable wealth. Go through your jewelry box and see what’s there. Even if you have broken gold or silver chains, you still have stored wealth. It may not be worth anything as jewelry, but if it’s gold (purer the better) or silver the metal is worth something. In a real emergency and as a last resort, grandma’s silver may buy you something. I inherited a set of cutlery that had been a distant aunt’s that I never knew, I can always trade a spoon here or a fork there for needed items. Sentimentality will go right out the window if you are cold and starving.
So, to review: Have a stash of cash $1,000 or what you can afford to put away and not touch. Convert some of that stash into silver and if you’ve saved enough and can afford it some gold, too. Dig through your jewelry box and find any gold or silver jewelry you have and put it with your “preps” so it’s there with everything else in case you have to leave in a hurry. After the crash/crisis/emergency/disaster/whatever, use you currency first, then barter if you can with what you have, then use the “junk” silver and gold (jewelry or flatware), then break into your silver/gold coins last. Keep as much silver and gold as you can for the future when things settle back down in case the government issues a new currency. Oh, why do that? Because, when a new currency is issued you’ll only get “pennies on the dollar” for the old and that $1,000 in cash could end up only being worth $100 or less. Ouch!
OK, that was all. I guess it was a good thing I forgot about money, it really needed more than just a mention on a list….