People should be worried about the money in their wallet:


Credit or Debt money:

In 1971 the world entered a credit-expansion spree, as the US-central bank became liberated from the obligation of redeeming dollars for gold. Propelling the US into a long credit expansion that fed dollars to the world in exchange for products from abroad. It also forced the US to run a permanent trade deficit with the rest of the world in order to generate a permanent flow of dollars to the rest of the world, necessary to create sufficient Monetary Reserves for all Central Banks.


In order to obtain dollars, the rest of the world has had to sell products to American customers at a lower price than which is demanded by American producers. It is self-evident that there is no other means of introducing an export product into US territory, then by means of underselling American competitors.



Trade imbalance:

This has caused a trade imbalance that wouldn’t have occurred with the use of sound – gold backed – money. This is a fundamental and important point that most people don’t understand, at least it seems President Trump is missing the fundamental reason behind the trade imbalances. The only solution to solve the problem of trade imbalances is sound money. Trump talks about resolving the US trade imbalance. The crucial point when being faced with the dilemma of resolving the trade imbalances is the simple fact that all that is imported has in effect already been paid for with true money instead of with credit money that is created out of thin air, and when that is spent, it automatically creates trade imbalances. So, the origin of trade imbalances isn’t caused by currency manipulations, or subsidising production or the like, as many seem to think. It is purely a consequence of using unsound money.


As a result of the above, the rest of the world responded to the incoming flow of dollars to the various central banks with the corresponding credit expansion that fostered a credit-based prosperity around the world.


Credit contraction:

However, over the past two and half years, there has been a sharp decline in these Reserves at about $42 billion dollars a month. At this rate, by the end of this year the International Reserves will likely decline by another $500 billion dollars, to $10.31 Trillion, from its peak in 2014, down by 14.31%. This will certainly accelerate with Trump’s stated intention to reduce or even eliminate the US Trade Deficit, which will subsequently reduce the feed of International Reserves to central banks in the rest of the world.


The decline in the total sum of International Reserves is a clear sign of a worldwide credit contraction. The economic consequence to a world that has been built upon the premise of ever-expanding credit will be the increasingly desperate liquidation of investments by businesses and individuals around the world, in order to pay off previously incurred dollar-denominated debts. This widespread liquidation will be a devastating struggle against the opposing current of the increasing scarcity of dollars.


Ludwig von Mises pointed out, that once a central bank indulges in the expansion of credit by lowering the rate of interest it charges on loans, it cannot stop expanding the credit: It has to go on expanding credit by constantly lowering the interest rate it has set. If the central bank decides to once again allow for the market to set the interest rate, then the previous expansion incurred will turn into a total liquidation, to clear out the malinvestments created by the artificially induced expansion. If the central bank does not allow the market to set the interest rate, then the expansion of credit will continue until it produces a crack-up boom, which is followed by massive debt liquidation.


This contraction of credit in the world will manifest itself in the form of bankruptcies at all levels, destruction of financial assets, collapsing prices, massive unemployment, currency devaluations left, right and centre, and of course, world-wide political instability.


On the other side of this coin are Governments; Wealth-devouring entities. The bigger the government, the more skilful at seizing capital and misallocating it, sending the economy into an Irreparable stagflationary spiral.


Excessive power over participants:

Even more important, is that the status of the dollar as the worlds reserve currency and the dominance of US companies in international finance, provides the US government with tremendous power over all participants in the formal non-cash financial system. It results in the worldwide subordination to American law rather than to the local or international rules and laws.


Every internationally active bank can be blackmailed by the US government into following their orders, since they can revoke their license to do business in the US or in dollars, which basically amounts to shutting them down. This happened to Deutsche Bank, which had to negotiate with the US treasury for months, whether they would have to pay a fine of 14 billion dollars and most likely go broke, or get away with seven billion and survive.


Having the power to bankrupt the largest banks, or even large countries, the US government practically has power over other governments too. This power, through dominance over the financial system and the associated data, already exists at present. The less cash there is in circulation, the more extensive and secure is their power, as the use of cash is a major avenue for evading this power.


Gold, true money to the rescue:

5,000 years ago gold was introduced as a new kind of money. It is money people could trust. Not a promise by someone. Not a threat against anyone. Not a credit against next year’s profit, or the expectation that someone will come to your aid if you are attacked by a third party.


This new “gold money” was something very different. It was something people could count on. It made it easy to settle a transaction right on the spot. No need to remember who owed what to whom. No need to speak the same language or worship the same religion. This new “gold money” was worth something in itself; intrinsically.


Gold helped cooperation triumph over brute force. With it, people could bargain for goods and services, rather than insisting on them. They didn’t have to take their neighbour’s wheat field by force to feed themselves. Instead they could buy the wheat.


Force doesn’t work in human affairs, because it doesn’t bring people what they really want. Force never gives a “win-win” trade. Nor does force work in an economy. When Central Banks drive interest rates down, they are driving buyers and sellers to do something that they otherwise would not do. They are exercising brute force on markets. Subsequently, centralised economic planning doesn’t work either.


Value is measured by what people really want and freely choose, it will not make the world poorer. Why would governments do things that result in the world being worse off? – Because they are a victim of the ever-increasing zombieism. Bureaucrats drive down interest rates to support zombies everywhere. Low rates also help make more money available to the government and its zombie pals.


Volatile Bitcoin:

Bitcoin is an electronic currency, not much different from paper money. Bitcoin, like paper money, has zero intrinsic value. Also, there are a great number of risks. As an example, Bitcoins can disappear without a trace and if something happens to the internet such as a temporary shutdown or cyber-attacks, investors will have a problem accessing their Bitcoins. Moreover, the biggest problem is government regulations. If Bitcoin and other cyber currencies are too successful, governments could start regulating the bitcoin market until it becomes just another paper currency. Bitcoin has nothing to do with wealth preservation. There is no better form of wealth preservation than precious metals.


The price of Bitcoin recently shot through the roof. But many had no clue how volatile this digital currency could be. The price of Bitcoin subsequently plunged by more than 20% as the People’s Bank of China (PBOC) sparked a crash, after informing investors to be wary of digital currencies. Bitcoin eventually plunged an additional 13%.


Reuters reported:

The price of the digital currency, bitcoin slid around $50 on Wednesday after China’s central bank said it had launched spot investigations on bitcoin exchanges in Beijing and Shanghai in order to fend off market risks.

The investigation of bitcoin exchanges, as well as BTCC, Huobi and OKCoin, was to look into possible market manipulation, money laundering, unauthorised financing and other issues, according to the statements posted on the People’s Bank of China’s website.


Over a period of only one-week, Bitcoin lost more than a quarter of its value. That’s a staggering decline. Remember, bitcoin is supposedly a currency. But currencies should never be this volatile.


This implies that Bitcoin isn’t money yet. It’s still a speculation vehicle. If you know what you’re doing, you could make a fortune trading Bitcoin. But if you don’t, you could lose a lot of money very quickly.


Nevertheless, Bitcoin is a step in the right direction. After all, anything is better than money controlled by reckless and increasingly desperate governments and banksters. But Bitcoin and other similar digital currencies have a long way to go before these can be called “money.”


Bitcoin and other crypto-currencies are based on blockchain technology, which is a tremendous improvement over the existing bank transfer system, in which all transactions undergo a clearing procedure. Blockchain replaces this procedure, which makes transactions faster, cheaper, and more secure, without the need for a banking system.


A Blockchain payment system is in effect digital cash; blockchain is not a currency, and it’s not money. It’s a technology that’s going to change the way that people buy and sell things. It’s more secured, cheaper, and far more reliable than any system of payment that exists today – including cash, checks, and credit cards.


Gold, true global money:

Gold, on the other hand, is a proven form of money. People have bought and sold goods and services with it for thousands of years. It’s survived every sort of financial crisis. And it has survived countless paper currencies. Gold’s value and by the same token silver’s value are stable. They are not going to plunge 25% or more over the course of a few days. There also isn’t a central authority in the world that controls PHYSICAL GOLD’S price or its supply. It’s a truly global currency. That’s why gold is still the best way to protect yourself from reckless governments and central banksters.


The price of gold has spiked 5% from the beginning of the year. Now it is trading above $1,200 an ounce for the first time since November. But, it will be headed much higher. – Remember, central banks around the world are losing their grip on their currencies. If this persists, more and more people are going to seek out alternative currencies. Many of them will seek shelter in gold, the world’s most trusted safe-haven asset.


Be aware; Any “money” held in a centrally controlled institution can be expropriated overnight. The rules will change without warning, then there will be no opportunity to escape the crooked system.


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