by Jeff Nielson, Sprott Money:
We have a failure to communicate. The vast majority of the investment public in the Western world has no understanding – at all – about how to preserve and protect their wealth. Of the minority of the investment community with some understanding of wealth preservation, almost invariably it is a flawed understanding.
Understanding wealth preservation begins with having a detailed and correct understanding of “money”. Understanding money begins with correctly comprehending the difference between money and (mere) currency. Currency is merely a medium of exchange. It serves no other function and implies no other properties/qualities. What we have in our wallets is mere (fiat) currency.
Money, on the other hand, is a store of value – meaning it preserves and protects our wealth. A simple historical example illustrates this principle. Two thousand years ago during the Roman Empire; with a 1-oz gold coin, a gentleman of that era could purchase the finest suit of clothing: a high-quality toga, belt and sandals.
Five hundred years ago; with a 1-oz gold coin a gentleman of that era could purchase the finest suit of clothing: a tailor-made suit and accessories. Today, with that same 1-oz gold coin, we can still purchase a suit and accessories, but because of the extreme manipulation of the gold price, we are (temporarily) forced to buy our clothing “off the rack”.
That’s two thousand years of (perfect) wealth preservation for the holder of money. Understand that the same math holds true with silver. Until the last century, the gold-silver price ratio was fixed at 15:1. It’s only over the last hundred years that the bankers have been able to completely skew silver prices – at a cost of burning through 4,000 years of silver stockpiles .
Then we have our paper currencies. In the just-over 100 years in which the Federal Reserve has had the statutory responsibility of “protecting the dollar”, the U.S. dollar has lost 99% of its value. This is actually an understatement, since the dollar today is fundamentally worthless, and only maintains any value at all through the constant manipulation of the convicted currency manipulators , the West’s Big Banks (i.e. the One Bank ).
Money provides eternal wealth preservation. But with ‘leaky’ currency, our wealth can dissipate to zero, over the course of a single lifetime. How? Why don’t we ask Sir Alan Greenspan?
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.
– Alan Greenspan , 1966
When we had a gold standard, we had money, and our wealth was safe and secure. Robbed of our gold standard by the despicable Paul Volcker , we now only have currency, and thus our wealth is vulnerable to “confiscation through inflation”. Translation? Theft by money-printing.
The bankers print more of their funny-money (i.e. currency), and the total money supply increases. This causes prices to go up and the value of our currency to go down. And every time it happens, we lose more of any/all wealth which we choose to store in the bankers’ paper.
Where does the wealth go? Into the pockets of the money-printers (currency-creators). The bankers give themselves all of the newly-created funny-money, thus they don’t lose wealth to inflation – they gain wealth, our wealth. Theft by money-printing. It’s that simple, just ask the Criminals themselves.
Give me control of a nation’s money and I care not who makes its laws.
– Mayer Amschel Rotchschild (1744 – 1812)
Today, Western populations hold only about 1% as much physical bullion as was customary for our populations 100 years ago. Put another way, a century earlier; gold and silver were the primary vehicles of wealth preservation for the Average Person.
A century ago; very few people “invested” in our markets. Why? Were they too stupid? No, they were too smart. A century ago; we had real money, meaning that we were able to keep all of our wages – because there was no theft-by-money-printing. With the workers able to protect their wages, they didn’t need to “invest” their capital.
In other words, people didn’t need to gamble with their hard-earned wealth in the crooked casinos that the Big Banks call “markets”. It was only when we lost the gold standard, lost its protection, and began losing more and more wealth each year to “inflation” that people found it necessary to gamble with their savings. The only way for us to simply break even is if our winnings from our gambling at least equal our losses to “inflation” (banker theft).
By relentlessly stealing our wealth via inflation, the bankers force us to gamble in their rigged markets , where they can (potentially) steal much more of our wealth. Heads they win; tails we lose.
Many people reading this already understand much of this history, and much of the economic fundamentals behind it. Because of this, those readers already have some/most of their wealth protected-and-preserved by converting that wealth to gold and silver.
Yet even many of these people are less-than-content. Why? Because over the past six years, the nominal prices for gold and silver have been in steady decline. These people read over and over in the vacuous pages of the mainstream media that holders of gold and silver have been “losing money” in recent years on their investments.
The basis of this mythology is the product of two deceits from the Corporate media:
Pretending there is “no inflation”.
Always presenting their “analysis” of gold and silver markets using only the USD prices for gold and silver.
Taking these deceptions in order, obviously (1) is the more absurd of the two deceits. Food and shelter costs, the two most-important categories of consumption, are spiraling higher at the greatest rate in our lives, but there is “no inflation”. Right!