Why I'm INVESTING My NET WORTH Into GOLD & SILVER
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So even Warren Buffet has invested into the gold mining industry!
Let’s figure out why this is and how we can take this opportunity to make money off gold and silver!
Hello everyone, My name is Sam and I welcome you to Financial Dragon.
Today we are going to talk about the basics of Investing in gold and silver, why would anyone want to do it?
Why are those assets going up so much right now and why am I personally HEAVILY invested in gold and silver MINING stocks?
I’m so excited to get into this topic and if you find value out of it, make sure to like this video, subscribe to the channel and LETS GET RIGHT INTO IT.
First of all, it is quite interesting,
there are so many different stocks that we have never ever heard about but I’m pretty sure almost everyone on this planet knows what gold is!
This rare, shiny and EXPENSIVE precious metal has been used as jewelry and as a form of payment for MILLENIA.
YOU SEE BACK IN THE VERY OLD DAYS people traded stuff they didn’t need to get the things they needed.
But very soon a problem arose! Trading goods becomes quite difficult if I need the goods you have to offer, but you don’t need mine!
That is when MONEY comes in. I can for example SELL the clothing that I have made in exchange for some money,
and use that money to buy ANYTHING I need, such as food.
Gold (and silver) turned out to be the PERFECT forms of money.
Gold cannot leave the surface of earth and go into the atmosphere.
It doesn’t burst into flame and it’s not poisonous or damaging to the holder.
In fact you can even eat gold and nothing much will happen,
apart from you wasting money of course!
Gold is also rare enough to make it difficult to overproduce and it is malleable to mint into coins, bars and bricks.
It is also very dense making it practical to carry around your wealth back when credit cards didn’t exist.
So how is this relevant today? Well guess what,
GOLD HAS MANAGED TO KEEP ITS VALUE and despite the prices of EVERYTHING being much higher than 100 years ago.
You can still buy the same amount of stuff with your gold!
And the prices have gone up so much because America over the last 100 years or so has slowly left the so called GOLD STANDARD,
where the dollar was at any point in time TRADEABLE for actual physical gold, thus making it impossible to infinitely create more dollars and devaluing the currency.
And by 1971 the link between gold and the dollar was COMPLETELY GONE
and now Federal Reserve chairman JPowell has the power to print as many dollar bills as he wants.
HOW IS THIS BAD and WHY DOES IT MAKE Gold a good investment today?
Well if more currency is created than actual value created that will simply mean that the current value will cost more.
Very simplified this is what causes inflation!
To try to illustrate this concept, imagine a restaurant selling a Pizza for 15 dollars,
they won’t increase the price because they know that means less people will come to the restaurant
and they have no reason to lower the price since they are getting enough customers at the higher price.
Now imagine a helicopter showing up outside the restaurant just DUMPING 100 dollar bills to the point where everyone in the neighbourhood suddenly has much much more purchasing power.
With this new money more people will be able to get a pizza much more often,
thus OVERCROWDING THE RESTAURANT CREATING BIG LINES OUTSIDE OF IT.
The restaurant will then be able to still get the exact amount of customers they had before even if they double the price of their pizzas to 30 dollars each.
SO THEY DO THAT. And that is inflation in a nutshell.
And the creation of “money out of nowhere” IS NOW HIGHER THAN EVER.
There is SO much government spending right now going out as stimulus and loans to households and companies of all sizes
And at this point there is more government spending being financed through DEBT which is BASICALLY PRINTED MONEY than there is financed by taxes.
Which means that if or WHEN this printed money leaves the big corporations and the large financial institutions and GOES INTO the US,
THE MARKET WILL REALISE THAT inflation is inevitable and that the prices of goods will simply go up.
And when people realize this and lose the hope that all the debt will be paid back some day,
THAT IS WHEN GOLD AND SILVER COULD GO UP HUNDREDS OF PERCENTS because people realize that can be the only REAL currency! At Least in my view.