Wednesday, August 1, 2012

Paper Investments are Worth the Paper They're Written On ...

I get somewhat flustered when I hear someone say something similar to what I heard last week- ? I just put $3,000,000 into the stock market!? I truly get a burden for them. It has nothing to do with wishing they would have invested with us; we don?t sell an investment product anyway. We give opportunities to get invested in tangible assets, ALONGSIDE us. We are in this thing together with our clients. We invest in the EXACT same place they do, so we don?t ?sell? anything.

My concern grows when I see others blissfully ignorant to what?s really going on. It takes a strong desire to be informed to heed sound research.

What I mean by research is simple information like this:

The Number of Banks that have Failed in the last 10 Years:

2000- 2
2001-4
2002-11 (because of 9/11)
2003- 3
2004- 4
2005-2006- 0
2007- 3
2008- 25 (introduction of QE1)
2009- 140
2010- 157 (introduction of QE2)

So, from 2000 to 2007 27 banks failed. And from 2009-2010 297 failed. This is the effects of the government printing 2 trillion dollars, which they call ?Quantitative Easing.? (QE1, QE2)

Entire states (which is the government) cannot pay their bills. How far behind are nations?

Why, you ask, are paper investments worth the paper they are written on?

And let me make sure I?m clear- paper investments include stocks, bonds, mutual funds, IRA?s, 401K?s, basically anything that is held in U.S. dollars.

It really comes down to a flawed system to begin with. Fiat currency as they call it, is a faith-based currency.

Listen to the Wikipedia definition of Fiat Money:

Fiat money is money that derives its value from government regulation or law: the initial value of fiat money is established by government decree.

Now, when the currency is backed by something tangible, (such as the gold standard which was finally done away with in 1933) a paper currency can be sustainable.

But, something people don?t understand is that one of the main reasons a currency must be backed by something tangible in order to retain its value is not because the item itself holds the value, although that is part of it, but really it?s an accountability system. There is only so much gold in the world. It is a limited resource. Plentiful to a point yes, but limited. We cannot keep producing gold at lightning speed like the Federal Reserve does paper money?to the tune of 2 TRILLION in two years (during QE1 and QE2).

America has been living above its means for a long time. We live a fantasy. And fantasies have the habit of vanishing into thin air -as fast as the money they printed out of thin air. In reality, the dollar is only better than Monopoly money, in the proportion that people believe it is. And what do you think the world is going to do when they realize this? Well, they already have. And that is why they are going around the U.S. dollar being the reserve currency for the first time ever, by trading amongst one another to avoid the dollar. They aren?t dumb, and neither are we. Our government knows our money is worthless?they just won?t tell you that. They will let it play out and they can?t stop it. One day soon the paper budget America has endowed itself with will be shown for what it really is- fiscal irresponsibility.

Just remember this when the dollar falls? government intervention is NOT the solution. They are the PROBLEM.

If you would like to know more about the current market conditions and how to protect your wealth, please call us for a personal meeting. It is our pleasure to aid people in protecting their wealth and to provide valuable information so they can make the best decision regarding their financial future. You can call us at (806) 686-4259 and we would be happy to meet with you and provide research on today?s economic climate.

Source: http://www.lubbockinvest.com/paper-investments-are-worth-the-paper-theyre-written-on/

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