There has been a lot of speculation going on in the world today that America is no longer able to suppress the inflation rate that has been going on in the world in the past years.

Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.

All of the worlds currencies are backed by the US dollar.

The more currency governments print,the more loans and credit cards people take out to help with their spending needs is increasing the inflation rates of the world too, which could end up in Hyperinflation. (most people don’t know that they are contributing to this) Hyperinflation has happened many times throughout history.

The US have been printing more money in the past years alone then there has been in the history of the US dollar.

Inflationary Pressure

There is a genuine concern that higher levels of national debt can cause inflation. If debt becomes too high, there maybe insufficient investors to buy the government securities (the way of financing the debt). Therefore, the government maybe tempted (or forced) to fill the shortfall in revenue by printing money (what countries actually do today). Printing money and increasing the money supply, will lead to inflation. The problem with inflation, is that it devalues bonds, so people will sell bonds, leading to higher interest rates and higher debt interest payments (Credit Cards/Loans). If investors see inflation is getting out of control, people will not want to hold bonds. Foreign investors will sell their securities and this will cause a devaluation of the currency. Investors will look for security and GOLD has always been a safe harbour.

Experts like Robert Kiyosaki, Michael Maloney and Ron Paul (Former US congress) has made it clear in the past years that we can no longer trust the government funds to help us when we are retired.

Last year (2010) the first of the 75 million baby boomers began to retire. Over the next coming years, let’s say that each of these 75 million begin to take just $1000 per month from the promised government retirement plan that they have contributed to over the years, that’s $75 billion per month being paid out from the government. This will dramatically impact the government. What will the government do? Increase taxes? This means instead of using this money to pay off the debt that they and the general public have created through loans and credit cards, they are paying out to the boomers. So where are they going to find the money to pay off the debt? Print more money and give out more loans? This WILL cause a few ripples in the economy. ( Rise in food pricing, VAT increase etc)

Gold Is and Will Be The Life Boat for All of Us if We Get on it Now

“Through the many economic debacles in human history runs one common thread: those who financially survive do so because they own gold.” – Michael J. Kosares, Author of The ABC’s of gold Investing.

We are in the second stage of what is called a Wealth Cycle. A wealth cycle is two assets (stocks/bonds,real estate) and (Commodities agricultural products such as crude oil, coal, salt, sugar, coffee beans, aluminum, copper, rice, wheat, gold, silver, palladium, and platinum). So at the moment these two assets are going against each other, one is becoming undervalued like stocks and real estate and commodities like gold and silver are starting to become valuable but not yet overvalued. (We still have a long way to go before they are overvalued)

What causes things to go from undervalued to overvalued?

Value shifts when the public rushes from one asset to another. The public generally chases whichever asset class is the hottest, be it on the cover of newspapers, what is said on the radio,spoken about on the news or even infomercials on TV as the best way to get rich, and everyone is starting to jump on. These are the asset classes that are sucking capital away from other asset classes. And by doing so, the one that’s hot becomes overvalued, the one that is not is undervalued. From the end of WW2 to 1966 the hot assets were stocks and real estate. From 1966-1980 it was commodities(and gold once it was no longer used as a currency). From 1980-2000 it was back to stocks and real estate. At the turn of the century the hot asset class has yet again become gold and commodities.

Throughout history many countries have gone through inflation and some even through hyperinflation. In these times gold and silver rise in price and became overvalued, therefore it is crucial to invest before we reach that point (and we’ll reach it fairly soon). So it has never been a better time to start investing in gold and silver, and soon we will experience the biggest wealth transfer in the history of man kind. There has never been a time before where more and more money have been printed by all countries to help with their debt crisis. As you can imagine the excessive amount of printed bank notes will lead to their value decrease at the same time causing gold and silver to become more valuable than ever.

“Investing is a team sport,” – Robert Kiyosaki

This is just a small message (but a part of a much bigger one) that I am trying to get across to people. If you were unaware of the economic situation in the world at the moment, well now it’s time to take responsibility for your future and invest in gold and silver which will guarantee the growth in value (unlike Paper money) in the years to come. Its time to start now. Not when the news of gold and silver’s growing value is all over the news,radio and papers. It’s not hot news yet so get in at the bottom, and head for the top of this wealth cycle so when the hard times hit, your financial future will be secured.

Mircel McSween

Author: Mircel McSween
Article Source: EzineArticles.com
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