How dollars can lose value

Wondering why the value of the dollar falls every year?

The value of the dollar is based on how many dollars are in circulation. The more dollars in circulation, the less your dollars can buy.

View dollars like stock shares. Let’s say you own 10 shares of a company that issued 100 shares. You own 10 percent of the company. If the company is worth $500,000, your 10 shares are worth $50,000.

If the company issues 900 more shares, and doesn’t give any to you, you will own one percent of the company (10 shares out of 900 shares, or one percent) and the value of your shares will be worth $5,000, a loss of $45,000.

By issuing more shares, the corrupt company took the value of your shares and gave it to the people who received the new shares.

You still own 10 shares, but the shares are worth much less.

Federal Reserve Bank and other banks create more dollars every day.  When they do this, they take the value of your dollars, and give it to those who receive the new dollars, usually the federal government (due to that deficit!) and other people receiving loans.

How can you protect yourself? Well,  if you owned shares in a company issuing more shares, you’d sell you shares. You can also sell your dollars.

Simply buy a product that will hold value (better than the dollar) and is highly “saleable,” meaning you can sell it in any quantity, at any time, for the current market price:

  • precious metals (gold, silver, platinum)
  • shares of a company that won’t issue more shares without increasing the number you own (a stock split)
  • collectibles such as comic books or stamps

It’s up to you. Just make sure you diversify across many products. If the prices of gold plummets, as it did in 1980, you won’t loss all your wealth.

Keep some of your wealth in dollars, so you can buy groceries and other items you purchase regularly. Keep the rest of your wealth in other products that retain their value. When you need to make a large purchase, convert your coins or stock shares or collectibles into the dollars you need.

With most of your wealth secured in products, not dollars, you won’t need to fear a currency crisis. If prices skyrocket, the price of the products you own, such as silver coins, will skyrocket as well (for the most part; every product’s price is based on it’s own supply and demand.)

The price of all products will rise because the value of the dollar fell. One day you need to trade three dollars for a loaf of bread, whereas if the dollars falls in value by one half, then you will need to trade six dollars for a loaf of bread because the value of the dollars went down by half.

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