Real Money value
As a freelancer, small business owner and international traveller I have constantly had the need to buy multiple currencies as well as figure out ways to hedge and protect my money from currency swings, monetary inflation which causes loss of value, as well as everything from various political turmoils (Brexit included!) and at times damn right currency manipulations from various banks.
Throughout history all countries printed or digitally created currencies eventually loose most of their purchase power, or in most cases go to zero! especially when Countries, Nations, companies or individuals take on excessive levels of debt which then places even more strain on their ‘fiat money’ (currency without intrinsic value)
Time to question once more ‘what’s real’ and what exactly constitutes real money.
It’s not without good reason that most central banks and global monetary institutions like the IMF own a lot of gold in their main ‘money reserve accounts’! Following the lead of most central banks by owning some real hard assets & precious metals; gold and silver might be prudent.
Generally most financial experts, fund managers and advisors say that everyone should have 5-10% of your savings in precious metals, yet hardly anyone owns even an ounce of silver or gold. Interestingly it’s a fact that even though silver is actually scarcer than gold above ground, since it is consumed rather than hoarded, silver is still currently priced at approximately just an 80th of the price of gold, even though it is physically mined at a much smaller ratio of just 11/1. On average Silver miners recover 11 ounces of silver to every 1 ounce of gold mined.
Gold and Silver – real money
Gold tends to be hoarded as a store of value
Silver is consumed – being in high industrial demand – as well as a precious element.
Silver and gold have of-course been money for most of man-kinds existence until the banking dynasties created their own pretend and virtual currencies!
So, this is how do I personally factor in some financial protection and hedge against the inflationary forces that are constantly at force to erode the value of paper and digitally created money, like US $ Dollars, Euros’s, GB£ pound sterling etc. It is after all the very aim of central banks to pro-actively manage the creation of enough ‘inflation’ to gradually increase peoples reliance on their endless money printing, which seems to be central banks preferred medium for reducing their vast monetary debts, QE or various other terms the banks created to invent themselves more fake money!
Back to real money: I have personally used the services of BullionVault for several years and after assessing various companies and facilities for buying and storing both gold and silver, I can highly recommend the integrity, simplicity and overall ease for buying precious metals fast and at the lowest costs to buy and store.
A few things I especially like about using BullionVault are;
1. Their web site and business is totally transparent – hugely informative and professional.
2. It’s backed by physical allocated precious metal – your gold or silver is always yours and is physically allocated.
3. Low costs + fast to set up an account + speed to transact anytime
4. Highly liquid market – there’s always close bids and asks available to buy/sell
5. It’s backed and part owned by the World Gold Council
6. Ability to buy, hold, trade or transfer gold/silver in key secure regions: London, Zurich, New York, Toronto, Singapore.
7. $2billion of client holdings – speaks for itself
They cover every thing you could possibly need to know, all in plain English! even if you just want to learn more about precious metals and the gold business BullionVault is a great resource to start at.
- My tip: Get used to deciding your own preferred buy price and aim to set buy orders yourself, thus creating your own bid – often right at real spot gold price, or sometimes even just under. That way it invites holders of gold on their system to sell to you at your offer price.
- Cost averaging in is also a good discipline to adopt: perhaps you’re comfortable buying gold at $1250, but the current spot is $1260, you could place an initial percentage of your trade on the bid at $1250, if it executes you’ve started allocating at your given price. If spot drops to say $1220, you get to average in a bit cheaper and if spot rises say $1280 – you’re making a gain on your initial purchase & you still have spare cash. Cash can be useful short term, it gives you optionality, although as mentioned it almost always erodes in true buying power over time with inflation and or de-valuing currency and trade wars.
- Worth reminding yourself that if one currency drops in value, it tends to mean your other currency changes value accordingly. Gold being primarily priced off the US$ tends to mean if the Dollar drops in value, the Dollar price of gold increase. Conversely if the UK£ or EU€ decline against the US Dollar that will increase the Pound or Euro value of gold or silver. This is the hedging effect of holding precious metals in your home Countries currency. i.e. If US$ gold increases in value – it isn’t necessarily purely a negative for your own holdings because the flip side of that means that your own currency may have increased in value. Plus – gold and silver are always a constant, an ounce of gold is always an ounce of gold wherever in the World you want to take and exchange it. That’s another reason central bankers and the wealthy like gold, it’s very very fungible i.e it’s interchangeable for other goods, services or currencies – literally anywhere in the World, which isn’t something you can say for most Crypto currency!
GOLD: Yes, I like ‘real things’ and don’t necessarily always trust the banks who invent ‘paper/digital debt money’
Finances & alternative money
It’s a real shame we weren’t taught any real monetary education at schools, it’s even more shameful that government institutions – ‘schools’ still aren’t teaching our children anything meaningful to help them understand how value is derived (hence the surge in school leavers opting to gamble with pretend non-existent alt-coins, crypto’s – most of which have absolutely nothing to back them and no real intrinsic value at all. I’m on a quest to help improve that, even if it’s just a small contribution, I think if we all help to educate and make a stance against this excessive debt and money printing, eventually it will make a positive difference, whilst helping protect some of our own hard earned money.
Crypto and blockchain is a whole different subject; the technology is definitely positive and will evolve into other areas of our financial lives, whereas almost all of the invented so called digital coins will vaporise back into the thin air they were conceived from, once they’re founders have cared them out. It’s worth noting that Gold has been treasured and accepted as money for 5000 years, whereas there isn’t any other currency in existence that has lasted much longer than 300 years.
Currency note – values
Although paper currencies have been around a little while, it’s all relative since most have them have lost almost all of their original value over the time of their use. i.e UK Pounds were originally defined as 12 ounces of silver (12 ounces of silver are valued a roughly £144, as opposed to your £1, which means in relative terms a pound is now worth just 0.6% of its original value, i.e The most longstanding currency has lost roughly 99.4% of it’s value as well as loosing it’s position as the Worlds reserve currency in the process! Likewise the current World reserve currency looks to be on a similar path having lost approximately 97% of it’s initial value. These are the 2 better ones! most other currencies simple get inflated away, reformed, destroyed by war or of the roughly 25% that have survived are currently in the process of battling with each other, to devalue themselves in order to gain political or industrial advantage of cheapening their nations export prices, or put another way ‘being inflated away’ (costs of goods or services in the currencies home nation are increasing in price)
1 thing I’d love to see a move towards, is for everyone to at least get to experience what it’s like to own even a small part of some real money for themselves. I’m a firm believer that children should also be taught to use real physical money – genuine pure silver coins, partly for their historical context but also much more, so that they get to learn about payments and barter, real ways to communicate and do business when they’re set free into the real World, especially if they intend to travel the World.
I really do think that we need to start a movement to help every citizen of the World own at least 1 oz of their own physical silver, so that everyone gets to have at least a tiny share of their own money. The problem is there just isn’t even a single 1 ounce of silver spare for everyone! Even though a solid ounce of real silver, real money is currently priced around just $16!!
Anything can be money
Did you know that it’s perfectly legal to use absolutely anything you want as money? There’s no reason at all why we can’t use gold or silver – real money, for trading goods and services as well as stores of value or industrial use.
Quest – imagine if we all became our own central banks! Like #bankonsilver & people experience the reality of handling something that’s real and of value!! rather than just digital pretend wealth. Perhaps this is something the Silver mining industry will embrace itself.
Meanwhile – take a look at BullionVault and you can even do a simple account trial using their ‘free silver’ offer – that’s the way I familiarised myself with their system, without needing to allocate any money until I was familiar with how their order board works. It’s real simple and easy to figure out though, actually a fantastically efficient system which even enables you to place your own bid/ask prices, really easy.
This post is purely my own experience of what works for me. You should always do your own research and become familiar in how you allocate your own funds. BullionVault have not contributed to this article nor have I received payment for the endorsement. They do have an affiliate referral, which I may receive compensation from should you choose to deal with them. Any referrals do not affect your own deals or offers in any way. I hope you enjoyed the article and if it helps you to also hedge, secure or insure your own finances, you might like to check out their referral offer for yourself & perhaps gain an extra little income yourself, once you are satisfied with their services.
I will also add some other useful resources for buying, owning, trading precious metals here – check back soon.
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Thanks and good luck