Throughout my life, I was always told to save my money, but truth be told, that might not be as wise as one would think. The U.S. dollar is losing value at a rapid rate, so bad that $1 today is roughly 4 cents back in 1913. That's a 96% loss in value! This article will outline why you should stop “saving” money, and how actually invest and make money from this crisis.
The Value Of USD
The main reason that saving money today is not the greatest idea would be because the value of the dollar has plummeted in the last 100 years! In fact, Warren Buffets' business partner, Charlie Munger, recently stated “The safe assumption for an investor is that over the next 100 years the currency Is going to 0”. Remember when I was talking about the date 1913? Well, that's the year that the Federal Reserve and the Banking System were created. A perfect example of what could happen to the beloved U.S. dollar is the failure of the Zimbobian dollar. The cause for the currency crash was hyperinflation. The Zimbobian dollar’s inflation was 80,000,000,000%. It was so bad that every few minutes the prices of food and groceries would double. The failure of fiat currencies is extremely common because of a problem that leads to printing money as a “solution” and then the currency becomes worthless. Sounds very similar to USD right now right? On December 23, 1913, we allowed the creation of a central bank, the Federal Reserve. Back in the day, you could cash out dollars for gold. This was done so banks can’t get too powerful. Without a commodity backing the dollar, banks can give as many loans out as they want. When President Richard Nixon took us off the gold standard the value of the dollar started to drop even more than it already has. The creation of a central bank and getting rid of a commodity backing the dollar resulted in a 96% loss in value. Like I said in the beginning, $1 today has the value of 4 cents in 1913. So can the U.S. dollar actually fail? Most likely not but it's possible. The outcome that would result in the collapse of the dollar would be if the U.S. can’t pay its debt back. Right now the government owes around $30 trillion dollars! If you want to see the debt the United States is in right now, click here>https://www.usdebtclock.org/.
Investing Into Debt
You may be confused, how can you invest in debt? Actually, debt is the best investment in today's time. If you can borrow a bunch of money at a low-interest rate that is lower at the rate of inflation or the rate to borrow money in the future, you could make a lot of money. For example, if I took out a loan of $100,000 and I took it out at 4% and interest rates go up to 7%, I made 3% on my loan. If I also used that money on an asset like real estate, I'm getting even richer without paying any taxes because I'm technically not generating any cash flow. The best way to fight debt in today's world is with more debt. Inflation steals money from the savers and gives it to the borrowers, and that's how the rich get richer.
Conclusion
I'm not saying that saving your money is a bad choice, to be quite frank, it's a great idea; however, it's not the best idea. With today's market and how it works, I would suggest investing rather than holding your money in a bank account. A study of over 700 currencies shows that the average life of the strongest currencies(reserve currencies) is roughly 100 years. The strongest currencies so far have been USD and the British pound. Normal currencies' life expectancy however is roughly 35 years. Did you learn something new? If you did please leave a clap and comment if you have something to say about this interesting topic. Have a great day my friend!
