Tag: your money

Why you may want to buy Gold and Silver now!

So let’s talk about your money. We all go and work all of our adult lives to provide for ourselves and our families. In other words we trade our time for money, don’t we?

Of course we do’ so what’s the big deal you say? Well I will explain it all to you here in this article.

And if I sound a little pissed it’s because I am. And by the time I finish telling you in this story you’ll probably be pissed as well.

So let’s get started

A short story is in order. When I was a child I was what we called a Paper Delivery Boy, in case you don’t know what that is today, because newspapers are almost extinct.

Well I would get up around 4:30 in the early morning, and the newspapers would have been delivered to my parent’s driveway. A big box truck would drop them off there.

Now it was my job to take each of these paper and fold them and wrap them with rubber bands, so that I could throw them.

I had a bicycle with baskets on both the handle bars and two baskets that wrap around the back tire of the bike. So once I had wrapped them I would get them loaded onto the bike and head out to deliver them.

Well we lived in San Francisco so you can only imagine the hills I had to pedal up. So I would get my papers delivered and then head off to school.

Now I always look up to the end of the month as a special time that’s when It was time to go and collect, for the cost of the papers. That in itself was an experience as some customers who try to get away without paying; never the less, I collected.  I had a binder that had these tear off tickets that served as the receipts for the customers.

So now on collection day I separated the amount that I needed to pay for the papers that were delivered to me, and the left over money was mine. What I usually did with a portion of my share was I would go to a restaurant called the Pink Mug and order a hamburger with French fries. And somehow because I was paying for it with my own money it always tasted so good!

So you’re probably thinking what does all of this have to do with buying gold and silver? Let me explain, after all you’ve already hung in there with me this long.

At that time when I got paid I would take what I could to the bank to save it. They gave us these small paper bank books. When you deposited they would make an entry into your book and stamp it with the banks seal.

So what happened to our money?

In those days banks would loan out deposits to people who wanted to buy something they didn’t have all of the money to pay cash for the item. It might have been a house a car or whatever.

Banks were allowed to hold a portion of the deposits as reserves and loan out the rest. They would make a portion of the interest and pay the depositors their share from the interest they had collected.

What I was not aware of at the time and most people are not is that banks no longer worked that way.  Over time banks were allowed to hold less and less reserves and actually could lend out more than nine times what they had in reserves.

So you might say what’s wrong with that?

I’ll tell you what that did was to create a lot of money and flood the system with this money.

Money creation

Something that we should all know is that when it comes to any commodity the more there is of anything the cheaper it becomes. Money is no different. When the banks create all of this money it causes inflation.

So what is inflation anyway?

Inflation in simple terms is when something takes more of something else to be traded for something else. So if you are trading your time to buy food let’s say and you are trading the money that you have earned to pay for the food, that’s easy enough, right?

The problem arises when the banks are creating more of this stuff undenounced to you, so as to constantly reduce its purchasing power so you need more and more of this stuff to pay for the things that you need to purchase.

1913 The Federal Reserve

In 1913 the Federal Reserve was created a nice sounding name isn’t it? Well this really is just a banking system designed for the banks. They create the money that we use without many restrictions and then charge us interest on it.

They have various ways of creating more of this stuff. Originally the money was tied to how much gold there actually was. So the money was tied to gold at a price of around 20 fiat dollars per ounce.

Fiat just means money that is currency that the government says must be used to pay debts. So the two work hand and hand together the banks and the government. It works for both of them because they can do just about anything they want and pay for it with this fiat currency.

This is the heart of the problem you are trading you time which is all any of us have in our lives for this stuff they are creating basically out of thin air. Since they have printed trillion of this stuff. To say printed is a misnomer these days because much of this stuff is just computer digits, no actual dollar bill are used. The digits are just transferred around.

I know this may be an eye opener for many of you, but no worries there are links in this article where you can click on to verify what I am saying.

 The Second World War

Now when the war broke out it became obvious that Europe would be taken over by Germany. As Europe became engrossed in the war those counties involved had huge expenses. And since the world was on a gold standard they would sell gold to pay for their war needs.

The United States was in an enviable position at that time because we were not in the war yet! And the countries that were needed things. Things that we made here in the states. Many of these counties would pay us with gold and so we accumulated a lot of it.

Now as time went on and the United States realized that we would have to get into the war ourselves, we also would need money to pay for all of the tools of war that we would have to supply.

Some History’

Now before World War 2 the United States was still coming out of the Great Depression of 1929.

So Franklin Delano Roosevelt needed to spend money in order to pull the nation out of the depression. So his Idea was to confiscate all of the gold that Americans had at that time, and then as soon as they had enough, he revalued the gold from 20 dollars to a higher price, namely 34 dollars an ounce.

This was around a 30% increase which gave the government money to combat the depression.

Because remember we were still on a gold standard around the world at that time.

To be continued…