How The Rich Predict the Financial Future

19 Mar

In America today, we are all concerned about our financial future.  The recession that began in 2007 – 2008 has devastated many of us.  Most Americans were unaware of the pending financial collapse.  I am sure that most of us would have postioned ourselves much differently, if we had known that our homes, retirements, pensions and savings were about to get clobbered.  Through some of my reading and research, I have come upon a process that the rich use to predict what is going to happen.  I always thought that someone had a system somewhere that would help us better gauge where our fiscal health was heading.

The wealthy use a seven-step process to determine what will happen to wealth based upon the state or states of our economic, social and military policies.  You might think that this system is very complicated and one would need an Ivy League accountant or economist to understand.  The steps are very simple and relative easy to see.  Surprisingly, this system has predicted the rise and fall of monetary systems for thousands of years.

Step one is when a country begins, the currency is usually very robust and backed by a tangible, valuable item usually gold.  The most of its life, the United States have had their currency backed by gold.  We were on the gold standard.   The second step is the establishment of social programs to help the citizens, especially the poor.  This makes reference welfare, social security and the safety net for the poor.   Also established are other social programs like courts and prisons.   With all of this prosperity, most countries will develop a strong military which is the third step.  A strong military is very costly and gives the country and its allies confidence in the country as a whole which in turn strengthens the monetary systems even more.   Since you have a strong military, the country usually goes to war, step four.   This will strengthen the country even more, but can get out of hand because wars are expensive.  Usually, when you start one war,  you’ll end up in another.  The United States has been in numerous wars and military conflicts during the last one hundred years.  In most cases, the consequences of these wars was a period of economic growth.

But in 1971, the United States took step five.  It went off the gold standard and began a “fiat currency”.  This meant that our currency was backed only by the word of the government, the faith of the people and the scarcity of the currency.  There are some real problems with this.   In a fiat monetary system, there’s no limit on the amount of money that can be created.  This also allows unlimited credit creation.   The rapid increase in credit feels like economic growth, but it is really is not.  The rapid expansion of debt caused the Housing Bubble of the last five years and  the failure of several major banking institutions.   Real estate values are at all-time lows and are continuing to fall.   Economists and government leaders predict that it will take several decades to regain the growth experience in America during the decade of 1998-2008.  The sixth step is hyperinflation which is the terminal stage of a fiat currency.   Failure of the US dollar is certain, considering that every fiat currency in history has failed.

The United States is just at the cusp of the sixth step.  One might ask, “How can this be on the horizon, since interest rates are at historic lows?”  But take a look at some of the items Americans have to purchase.   Gasoline in up from around $1.80 per gallon in 2008 to almost $4.00 per gallon today.   Let’s not get to groceries because the pain in purchasing these is intense.

As was discussed earlier, in a fiat currency there’s no limit to the amount of money that can be circulated.  Today the Federal Reserve is printing money to help alleviate the Federal government debt which is over $14 trillion dollars.  It is estimated that the money supply in increasing by 13% per annum.  Rumor has it that the Federal government is printing money to buy its own debt.   We all know that the United States almost defaulted on its debt and had its credit rating lowered for the first time in history.   The question is “Will the government keep printing money or will they stop the presses and default?”

The final step is a great  wealth transfer.  Those who are prepared will reap the benefits.  We must protect our assets.  Why do you think there has been a great run to purchase gold and silver?  We all lost massive amounts of money during  this recession.   Confidence in our traditional wealth building process is very, very low.  No one really knows what will happen.  The US Dollar is the standard for all currencies.  Every effort will be made to keep it afloat.  Where will you stand?  This is just a warning.  Do your due dilligence.  Make a decision and move forward.  But beware, our system is broken and to survive you must take some action.


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