Where Do I Invest? The Brutal Truth About Money

Which is the real Money ? Gold or Currency

Money and currency are not the same. Money is the measure of one’s wealth and the currency is a measure of one’s hard work and valuable time spend for making Govts, banks and X ( if there exists any partner other than banks and Govts) rich. People work hard and spend most of their time to it hoping for a better future. And what happens in future? It’s still the same. And why? Because we don’t earn real money/wealth. What we get is a paper of appreciation from our govt named ‘Currency’. And tomorrow value of this paper may become half, quarter or zero as it can be printed infinitely.

Gold is the real money and has real value. It is best to hold gold as physical coins rather than Gold Jewellery. All the fiat money include US dollars, INR are just physical papers with zero value; Merely pieces of paper printed by the govt to increase the spending of public and thus make the banks and the rich ones richer.

In the beginning of the gold standard currency system, it was pegged to gold in 1:1 ratio which they demonstrate value to the currency. All the countries followed this standard until the Bretton Woods System. After the world wars, the US had a good reserve of gold likely 2/3 of all the total gold in the world. they are in the front line of selling military supplies to the countries during the time of war. That is they were indirectly involved and boosted their wealth. After the effect of the war resulted in biggest economic fall and despair to the countries as there was no growth other than destruction. This crisis opened a golden opportunity for the US government to eliminate the gold standard and replace it with their dollars. That was the Bretten Wood System. The countries agreed to replace Gold with Dollar standards and accept Dollar which itself is pegged to gold as the standard for the international trade and cross border settlements.

gold fiat money

Soon the US Dollars were widely accepted all over the world and the federal reserve keeps the printing of paper pieces going on. And in the long run, the ratio between Dollar to Gold has varying larger as the more dollars come into circulation. The use of US dollars to purchase enormously increased among the world. According to the govt, the public should increase their spending to build economic growth but actually, they want the public to spend their time and energy for free. So they started printing trillions of notes in a time frame and they keep injecting to the market.

But the countries found out that they own dollars which is actually increasing itself and losing its value gradually. And the Bretten Wood System collapsed. The countries demanded to claim the real gold from the US, Not the dollar- gold. The US lost half of their gold reserve in this way. The price of gold increased sharply.

dollar box

And they kept printing more and more notes despite of low gold reserve and sent them to the market. Eventually, the monetary system collapsed and the value of the dollar also back to its actual value- zero. Triggered inflation. Unemployment, poverty and economic fall. And the value of the Gold is still rising.

Is this end? Haha no! They quickly implemented the concept of Fiat Money.

It was also accepted by all countries and they began to create their own fiat currency. Federal Reserve of US govt committed the crime consciously before and now it is agreed to do the same by all countries. Fiat money is another manipulating mechanism invented by the govts to make it worse than before. Unlike the gold standard, the fiat currency has no pegging of gold. Then what gives its value? I don’t know! The govt says overall economic growth of the country gives the fiat money a value. INR, USD or any currency printed by govts are treated as fiat money and gives its value when actually has no value. Just like the US done earlier, the govts of each country started to print their currency as much as they want. This time Gold is not in the game. Then why the price of gold continues to rising instead of falling when the economy in crisis? The answer is just simply the gold has limited supply before and after. Nobody can print it like paper money. If the fiat money increasing its circulation it will eventually lose the purchasing power and to the inflation.

coin money

Imagine if you were used to paying 100 rupees to buy 1Kg of carrot and suddenly reserve bank inject money to the circulation which is the double of current market supply. Obviously, we have to pay 200 Rupees to buy the same quantity of carrots. We can see the price of things or food items hiked but the fact is its price or value is not increased but the same. What happened is that the value of currency or fiat money we used to buy the things decreased. Such a situation is inflation. This will continue to happen as the govt keep printing and injecting more currency supply to the market. The situation gets worse and at some point, the economy will fall. When we encounter any economic crisis, the gold will rise and shine. People lose faith in the fiat money and rush to accumulate the metals; the real, physical, supreme and the great survivor of all time – ‘Gold’

Earlier we fought the trade crisis with gold itself, then with the currency supported by gold and now battling against the gold… Do you think we can win the battle? Maybe if the fiat money can’t grow infinitely. We should switch to a new monetary system which is unique, limited, non-printable and with the qualities found in the metals like gold, silver or just go with Gold- the old monetary system.

coins measure

Year-wise price of gold (24 karat/10 g)

1970: ₹184

1980: ₹1330

2000: ₹4400

2005: ₹7000

2015: ₹26000

2019: ₹35220

2020 Current price: ₹42400

++ Look at the past to see the future ++ 😊

Above provided a small brief about our current monetary system and significance of the Gold in it. More you look into the system, the more you uncover the role of banks and the surprise boxes behind the Bank deposits, digital cash, bonds, loan, debts, taxes and..