by Shane White
Where are we now? There are many countries now in the world who are using various types of currency that are basically based on nothing more than debt. The more we owe, the better the worlds banks are because they are the ones who print and control this money. This is where consumer confidence comes in to play. The more confident you are in the financial system, the more comfortable you are and the more likely you are to borrow money to buy things.
Now the banks print more money whenever they feel like they need it, but that makes the value of the money they have already printed worth less. This works out great for governments because they can pay off their debts with money that is worth less than it was when they borrowed it. This means that they are basically paying off their debts for less that what the original debt is worth.
One problem with all of this is that everyone has to borrow more and more money to make this whole system work. This is obviously not sustainable. http://www.usdebtclock.org/ at the time I wrote this shows the federal government is now over $15.6 trillion dollars in debt and the average family in the US owed over $600,000! How is this sustainable in the long run? There will come a point where this whole farcical system will break.
The fact is, it is already showing signs of failing. If you read the news, there are many countries that do not owe anywhere close to the amount of money that the United States does, but they are nearing default, or are listed as basically in default. Look at the financial situation of Greece, Portugal, Italy, and China to name a few. Do some research and see for yourself.
There are several countries using the Euro that are in desperate need of rescue right now. This is putting the Euro itself in jeopardy. There have been many predictions recently that have claimed that this currency is close to failing. This is so alarming that many nations are throwing money at this problem to try to avert catastrophe. The problem is, China’s economy is based on cheating, and the dollar itself is getting weaker. What you could buy for one dollar today would cost you around 3 cents 100 years ago.
I am not saying that there will be a global financial collapse tomorrow, or in a month, in a year, or even ten years. Signs are pointing to bad consequences of the way we run our monetary system. What I am saying is that you should be ready. Stock food and supplies that you might not be able to buy if your dollar is suddenly worth nothing and make sure that you have something of value to trade with. History shows that precious metals like gold and silver have held their value through the ages. Consider these.
More to come on this topic...
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