What is money?
Over the past century we have come to believe that money is cash, the paper notes in our wallets.
But is that what 'money' really is? Does it make sense that printed pieces of paper have so much perceived value throughout the global village?
On the subject of the global economy Robert Kiyosaki once mentioned that "Paper money is man-made money, but Gold and Silver is Gods' money".
This was a reference to the Gold Standard and humanity using gold, a metal with real intrinsic value, throughout most of our history. Which is why today continuous print runs of paper money are causing inflation and de-valued currencies, that make economic recessions and depressions all the more feasible.
The amount of Gold in the Federal Reserve is most definitely not on par with the amount of US Dollars in circulation (based on world gold prices). In fact it's similar to all central banks across the globe.
But that measure is in an era where the Gold Standard does not in reality even exist.
Britain broke the tie to gold in the 1930's and the world followed them, including the US. But the US later introduced a partial-tie. Which Nixon subsequently abolished in the 1970's.
So the worlds Governments have an effective license to print money. It is no longer backed up by gold or pegged against anything of intrinsic value. The consequence is that in essence paper money itself has no intrinsic value.
The law says it is money and after that it all hinges on the confidence of the people i.e. it is purely psychological.
Hence when we enter recession we see that there is a lack of confidence after too much money is printed, and then banks and corporations have acted irresponsibly.
In contrast gold is gold and you definitely cannot make it at will on a printing press.
When we know these facts, then banks and pension funds are the worse place to keep your earnings.
Bankers and investors do not tie up their cash in savings accounts, they remain rich by keeping their wealth in the form of real assets.
Therefore best advice to people is that they need to invest in hard assets like property, precious metals, and commodities generally. Investments are best tied-up in things with real intrinsic value instead of cash which is in effect trash.
This smart investing will help protect your finances and help you in your way to become a real money making expert.
Article Source: http://EzineArticles.com/?expert=Lex_Ferrari
