Throughout history a number of things have been used as a currency or medium of exchange. The inflexibility of trying to buy a suit with a few chickens when the vendor has no need for chickens, led to the creation of a more standardized method of exchange with a recognized value.
The first paper money was introduced in China in the 7th century. Paper money has a number of advantages over coins in that they are lighter, easier to manufacture and cheaper to replace. The downside, is that repeatedly throughout history these ?notes? evolve into a fiat currency when they are no longer backed by a true asset with value like gold or silver.
As soon as this happens the currency?s days are numbered, and on average a fiat currency?s lifespan is 30-40 years. The current reserve currency for virtually every country on the planet has been a fiat currency for just over 40 years now ? meaning it?s days are numbered. If you use that money to buy gold or buy silver however, you?ll find that your purchasing power will remain virtually unchanged ? and has been for centuries.
A gold coin today will buy the same things now as it always has ? a fine suit, a nice belt and a pair of shoes. What changes is how many paper bills it takes to acquire the gold coin. Would you rather have a pocket full of private gold and silver, or a pocket full of paper that?s losing value by the day?
Source: http://goldsilver.onlinetips.co/gold-and-silver-investing/private-gold-and-silver-is-real-money.html
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