Inflation is like high blood pressure, it's a silent killer not felt or realized until it's too late. Inflation, in the world of finance, is a general rise in prices and decrease in the purchasing value of money. Remember when your grandpa said he use to get a sandwich, a bag of chips, AND a drink for 25 cents? THAT's inflation, and it's been happening slowly but surely
since August 15, 1971 when president Richard Nixon severed the last ties between the dollar and gold with the Bretton Woods System. At that time gold was valued at $40.80 per ounce, today it's valued at $1,884.43 per ounce.
As a historical measuring stick, the concept of inflation first became a problem during the Roman Empire and the comparison to the present financial state of the United States is eerily similar. For the first 170 years, the Romans enjoyed great financial stability and prices remained the same for goods and services because their coins were pure copper, silver, and gold. As time passed, however, they felt the need to debase their money in order to expand the monetary supply to pay for various non-ending wars. This is the first example of a government spending beyond its means, similar to the United States and its $3.7 trillion dollar deficit.
President-elect Joe Biden's $1.9 trillion stimulus package will only add fuel to the inflation fire. Some will argue that the national deficit can easily be forgiven, negotiated, or written off the books or that it doesn't affect the average citizen. If that were the case, why has the price for gold risen $1,844 since 1971? Prior to then, the price of gold hardly changed at all. Why can we no longer buy a loaf of bread, a bag of chips, AND a drink for 25 cents? This all seems ridiculous because we're just use to prices being high these days! We've accepted it as being normal because it's all that most of us have ever known.
What makes gold and silver so special as a means to value money is that it keeps us, our government, and politicians in check because you can't just print more of it. It's rare and gives us a finite amount of money in the system. Things really got rocky in the final stages of the Roman Empire when they experienced hyperinflation; rapid, excessive, and out-of-control general price increases in an economy. Let's consider part of president-elect Joe Biden's stimulus package: a federal mandate of $15 per hour for minimum wage. On the surface, this seems like a great idea! However, it will only add to the bottom line for small business owners; their expenses will be higher; therefore they'll have to raise the prices of goods and services at some point even higher!
This is where the true conservative views, not these new age Republicans, clash with the views of the Democrats. True conservatives believe in letting the free markets operate and keeping government interference to a minimum. What we've seen as of late is the Republicans acting more like Democrats and our politicians want to do is stay popular with the public so that they stay in office. Many of them are very well educated and know that the endless printing of money has failed horribly every time throughout history. That being said, you should protect yourself with assets that have proven to be a fail safe in times of uncertainty.
As Julius Paulus said in Rome, "[money] circulates and maintains its purchasing power not so much from its substance, as from its quantity." In other words, the power in the asset or currency is in its scarcity. And so, to protect yourself from the inevitable doom of hyperinflation, I suggest buying gold, silver, and cryptocurrencies. The only cryptocurrency I suggest is Bitcoin because it's been forever limited to 21,000,000 bitcoin, which will ultimately lead to a meteoric rise in its value. However, the other cryptos are worth taking a look at as well. If I had to choose between gold and silver, I'd suggest silver because its price has not skyrocketed like gold and it's actually pretty affordable. If you're new to all this, cryptos can be bought easily on the Coinbase app and physical gold and silver is available to purchase on the Apmex app.
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