Gold - did you know?
The Value Of A Life
In today’s world everything comes back to measuring our wealth with money. The produce and value of our entire existence can be quantified to a degree by money!
Have you ever sat back and taken into account everything you own and written it down on paper? I mean everything; things like all of your clothes, all of the furniture in your house, your motor vehicles, your jewelry, all of your electronic and entertainment equipment, your home or apartment, etc. Every single tangible item you have. Then add it all up to come to one total dollar amount. After you have the total, take 30% off, because more than likely you will overvalue the items.
Next take all of your loans and debts (things like mortgages, personal loans and credit card debt) and total it all up. Subtract this total from the amount of everything you own.Take this figure, even if it is a minus dollar amount, and divide it by the total number of years you have worked over your life until now. When you reach this dollar figure per year of your working life, this is the per annum figure you have sold your life for. – A sobering thought for many!
MONEY IS A THREE-LEGGED STOOL
I have mentioned many times before, and will mention many more times to come, some wisdom from one of the richest men who ever walked the face of the earth. He boldly states these words in his writings, “A feast is made for laughter, and wine makes merry; but money answers everything.” For those of you who might be curious, look it up yourselves in his own personal autobiography found in a New King James Bible, the book of Ecclesiastes, Chapter 10, Verse 19.
Earning, Preserving and Protecting your wealth is very important. Understanding the function of money is a main key to achieving this. There are three aspects to money’s function in an ordered economy (and remember, without order there will be disorder possibly leading to anarchy).
1. UNIT OF ACCOUNT
• Divisible into smaller units without loss of value; precious metals can be coined from bars or melted down into bars again.
• Fungible - That is, one unit or piece must be perceived as equivalent to any other, which is why diamonds, works of art or real estate are not suitable as money.
• A specific weight, or measure, or size to be verifiably countable. For instance, coins are often made with ridges around the edges, so that any removal of material from the coin (lowering its commodity value) will be easy to detect.
2. MEDIUM OF EXCHANGE
• When money is used to intermediate the ex-change of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system such as the 'double coincidence of wants' problem.
3. STORE OF VALUE
• To act as a store of value, money must be able to be reliably saved, stored, and retrieved and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. In that sense, inflation by reducing the value of money diminishes the ability of the money to function as a store of value.
The most important aspect of the three functions I’ve just stated is the Store of Value part of money. Most people normally do not consider this aspect of money until the erosion process, via the avenue of inflation, becomes evident. Without understanding the three functions of money, you are missing part of the puzzle to then fully understand inflation.
I AM BEATING THE DRUM OF INFLATION AGAIN
There’s a lot of debate in the public domain about what will happen to the price of Gold during inflation, deflation or stagflation. Many economists just can’t seem to decide which one of these types will unfold in the days ahead. They also can’t decide which one will benefit or disadvantage Gold.
Definition: A persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency.
Before the great depression of the 1930s, Germany went on a massive inflation known to historians as the Weimar Republic. If you don’t think Gold and Silver rises during inflation, which then lead to a hyperinflation, view the chart here:
Definition: A fall in the general price level or a con-traction of credit and available money supply.
On September 8, 1933, during the Great Depression and almost four years after the October 1929 stock market crash, the new American president, Franklin Roosevelt, raised the domestic price of Gold by 44 per-cent. It went from $20.67/oz, where it had stood for more than a century, to $29.82/oz.
The deflationary pressure was so viral that prices continued to fall during the balance of 1933 while the dollar strengthened, thus exacerbating the deflation gripping the American and global economies. There-fore, on January 15, 1934, President Roosevelt pro-posed further reflationary measures to Congress, which promptly passed the Gold Reserve Act on January 30. The result was to fix the price of Gold at $35/oz on February 1, bringing to 69 percent the total in-crease in the price of Gold over the space of just five months.
So if you think Gold doesn’t rise in a deflation, think again.
Definition: A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.
Stagflation occurs when the economy isn't growing but prices are - not a good situation for a country to be in. This happened to a great extent during the 1970s when world oil prices rose dramatically fuelling sharp inflation in developed countries. For these countries, including the U.S., the effects of inflation were made considerably worse because of this stagnation.
Gold in 1971 was $35/oz and by 1980 rose as high as $887.50/oz in intraday trading for an approximate increase of 2,500 percent outstripping all other in-vestments of the time.
TAKE ANOTHER GOOD LOOK
Well there you have it; Gold rises regardless of any of the different types of „FLATIONS.’
Sometimes in my daily endeavours I have the opportunity to speak with individuals who are in the latter part of their life - people who are looking at retirement or who are looking beyond retirement and wish to pass wealth onto their next of kin. They come to me seeking counsel regarding their life savings.
I always start off by reminding them to look at their life savings as a store of their entire life’s labor efforts, whether it be from direct physical labor, intellectual labor, leveraging of others’ labor, or a combination of the former. I remind them that the savings they have is all the sweat, heart effort or ache and toil of everything they have ever done all now stored up in this sum. Basically it’s a collective effort of everything they have ever done from their entire life’s work.
I become very repetitive when I am explaining this, because I want these individuals to realize the magnitude of what I am saying; it is not something to consider lightly. Sometimes I don’t get through to them; however, most times I do. When I do, a number of the responses I receive are very sobering; some people have even wept. Depending on the position people find themselves in, I go on to also remind them that ignorance of this truth doesn’t exempt them of the outcome, bad or good.
From this place I speak about the third leg on the chair of money, which is a storehouse of wealth. I can then move on to why Gold and Silver is so important to save in when it comes to the preservation of one’s entire life’s working effort. Think about it - it just might change your life view!
YOUnique Independent Business Owners are in such a powerful position with the best of multiple avenues:
1. You have the ability to save in Gold and Silver.
2. You have the ability to help others start saving in Gold and Silver.
3. You have access to the knowledge.
4. You have the ability to pass the knowledge onto others.
Until next time,
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