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Lorimer Wilson ~ Munknee.com
Nobody knows when the final crisis will occur, but like so many times throughout human history we are marching down a narrow path to the final catastrophe of our fiat currency system. [Let me explain why.] Words: 1336
So says Mark Motive (www.PlanBEconomics.com) in excerpts from his original article* as posted on Seeking Alpha which Lorimer Wilson, editor of http://www.munKNEE.com (Your Key to Making Money!) has further edited for length and clarity. (This paragraph must be included in any article re-posting to avoid copyright infringement.)
Motive goes on to say, in part:
Over the past 40 years, we have printed money and expanded the credit system to grow our economy. During this period, as we papered over cracks that appeared in the system, we continued to grow the economy in nominal terms. By not resolving underlying issues, economic cracks grew into gaping holes requiring increasing amounts of credit and monetary expansion to maintain a semblance of prosperity. Crisis after crisis, opportunities to resolve massive imbalances were simply pushed into the future, allowing those imbalances to compound. While many view the 2008 crash as the apex of the credit and monetary cycle, I fear it is not. Since 2008, economic policy based on credit and monetary expansion has not changed and continues to push an escalating crisis into the future.
Human behavior is too hardwired for us to change paths, regardless of how different we think we are. Even the smartest of men can become seduced by the near-term, quick solutions by which they are judged. Human nature is geared to solve immediate problems (e.g. how to escape the lion creeping through the village) at the expense of lasting solutions (e.g. divert resources and invest the time and energy to build a protective wall around the village). Because of this human tendency, history is littered with the remains of dead currencies that were destroyed by near-sighted policies.
In the wake of this destruction lies the average person, whose savings are wiped out entirely by currency collapse. Think about that for a second: in a bear market an equity portfolio may fall by 10-50%, but the portfolio can still recover over time. In a complete currency collapse entire savings accumulated over a lifetime are wiped out. There is no recovery from a complete currency collapse.
Examples of Complete Currency Collapse
Why should investors and average people protect themselves from what today seems like a low probability/high impact (i.e. black swan) event? Because total fiat currency collapse occurs with remarkable frequency. Below, I have listed a handful of the worst debacles from the past century alone:
After the end of WWII, amid the chaos of a continent in ruins, Hungary experienced the worst hyperinflation ever recorded. At its fastest pace, the Hungarian pengo was losing half its value every 15 hours.
Everyone’s favorite president (and hobby economist), Robert Mugabe, raided the central bank to cover tax revenues lost to economic “reforms.” At its peak, the Zimbabwe dollar was losing half its value every day.
By filling budget gaps with printed money, Yugoslavia experienced a currency collapse that, at its fastest pace, saw the dinar lose half its value every one and a half days.
Probably the most analyzed currency collapse in history, the Weimar Republic hyperinflation was arguably the result of budget deficits created during and after WWI. Notably, the massive reparations payments imposed by the Allies tipped an already weak German mark into a complete collapse. Although the utter destruction of the German middle class was the direct consequence, the German hyperinflation likely hastened the rise of Hitler and the march towards WWII.
Greece, 1942-1944, 1953
Greece is dominating the economic news today, but the country is no stranger to financial disaster, as it has defaulted repeatedly throughout its history. At the worst point of Greece’s 1942-1944 inflation, the monthly inflation rate ran at a whopping 13,800%.
The above five examples are some of the worst inflation cases from just the past 100 years. Looking back even further, we see currency collapses repeatedly across empires and administrations throughout history: Rome, China, France, and [even the United States of] America.
The Common Cause of Currency Collapse…
To continue reading go here: Currency Collapse Coming: Go Get Gold Now! | Before It’s News.
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