Digging Deeper …
by Justin Angell
So my brother has long advised me against giving anything that resembles financial advice and I know he’s 100% right. The reason I’m writing this is because I’m letting my conscience be my guide, I’m intending this article to be more informational than advice. The bottom line is I believe the monetary system we use globally is a debt-based system and it depends on the continuous creation of more debt, inflation and currency debasement to keep the entire system rolling.
Since the invention of paper (Fiat) currency hundreds of years ago, the failure rate for government currency historically is 100%. Governments figure out they can promise the moon and borrow the money to pay for it because all they have to do to repay that money is print more of it.
The problem we have today is for the first time in history every single government in the world is printing money to pay their debts, accumulating trillions of dollars of sovereign debt. Throw in tens of trillions owed to citizens by their government in the future for things like medical care, pensions, etc. Then on top of that throw in trillions of dollars of personal debt of the citizens… I could go on with more examples, but basically you get the picture that the world debt of sovereign and personal entities has reached or soon will reach a point of unsustainability known as the debt/death spiral.
When my grandfather was 15 years old, he was the oldest of four siblings, and his father died suddenly. He quit school and got a job so that he could take care of the family, but the bank wouldn’t give him a chance. Two weeks after the funeral, the bank’s crew came into the house, packed up their belongings and set them out in the street, repossessing the house.
For the rest of his life, he did not care much for bankers and especially banking policy. “A banker is someone who will loan you an umbrella until it begins to rain and then they’ll ask for it back”.
The Family Rule drilled into me and I’ve hopefully drilled into my kids is “never buy a depreciating asset with borrowed money”. If you do, there’s little difference than volunteering for modern day slavery. My father taught us about being on the right side of interest, the old joke is you should aspire to sign the back of checks more often than the front of the checks.
In short, I believe the monetary system is breaking. The question is what do we do about it? Historically, farmland has been a great appreciating asset for our people in agriculture. I believe however, when even only the interest on a purchased acre of land cannot be produced by that acre, land prices are probably topped out.
What other options do we have to protect our families and our progenies wealth?
Out of curiosity, I have followed bitcoin/cryptocurrency for at least 10 years and precious metals longer. I have always been interested in how money works and how to invest and speculate to make money off of the system. I had a trading account with some more experienced buddies we called Cloverleaf Investments when I got out of college. We traded ag commodities as a group and our goal being to avoid greed and only make $400 a trade. After a few years, I was the only one left and I began trading wheat and silver with my own account. My point is I’ve followed this for a long time, and I feel obligated to alert readers because I believe something big is happening in the world’s financial systems.
Unfortunately, for you/us I’m not smart enough to figure everything out, so I’m going to tell you what I think I know to be true. Again, this is not financial advice.
The fiat/fake money system that we have today including fractional banking is all based on debt. Where does money come from? Well when someone goes to the bank and borrows money to buy a house, that money is instantly magically created. Similarly, when the government needs money to pay bills, it uses tax revenue, but somewhere along the way our politicians figured out that if they spent too much, they could just fire up the printing press.
At one point in history, governments’ money printing was limited by the physical ability for printers to print and the supply of paper and ink. Today’s politicians have no such limitations. They create money, infinite money, with the push of a few buttons. Known as the M2 money supply, the government keeps track of how many dollars are in circulation globally.
I’ll have an interesting chart for the article to illustrate my point.
Historically, the governments of the world were also limited by the amount of gold and/or silver they possessed backing their currency, precious metals. Government issued coinage historically has been a good barometer of government financial health. Every faltering empire in history has debased their coinage that’s why we have zinc pennies, dimes, nickels and the quarters are nickel/copper alloys instead of silver.
Precious metal scarcity served as a throttle, but that was removed in this country in 1971 when Nixon took the United States off the gold standard. Without this limiting feature, and the dollar reigning as the world reserve currency; our economy was allowed to expand exponentially.
The dollar replaced the British pound Stirling as world reserve currency right after World War II. That title was solidified/codified in 1974 with the birth of the petrodollar. In exchange for security guarantees from the United States, the Arab countries and really all of OPEC agreed to only sell petroleum using American dollars. They obviously hoovered up (sucked up) billions and billions of American dollars, which they turned around and used to buy U.S. treasuries that funded our government’s debt. One big circle.
U.S. treasuries became the globally accepted standard and store of wealth. The only problem is eventually debts come due, and the relentless compounding of interest eventually begins compounding on itself. As a sidenote, one of the greatest blunders of the previous administration was allowing the lapse of the petrodollar agreement.
The finance wizards of the world made the system last longer than I thought they could, but I believe we have come to the point where government debt, not only of this country, but all the countries of the world have reached a point where it cannot be sustained.
So the bottom line is the fake/Fiat debt based monetary system that we’re using I believe is faltering. Proof would be the continuously rising price of gold. As a sidenote, gold is not actually rising in price, but what is occurring is our money is being constantly debased and diluted by government money creation. Again, I will refer to you to the chart that describes the M2 money supply versus gold and silver supplies.
A global financial standards agreement known as Basal III Accords takes effect this month. One of the main provisions of this updated global financial agreement allows gold to be held as an asset by banks. Previously gold was considered a dead asset or even a liability and had been replaced as the global store about value by U.S. treasuries. Gold not being an asset in a bank vault?
Obviously, that pushed Global Central banks to store U.S. treasury notes instead of gold.
When you’re the top dog and you’ve got the world‘s largest military, you can make countries buy your debt and use your treasuries as the only store of wealth. We all must remind ourselves of the golden rule, “He who has the gold makes the rules”.
The incompetent Biden administration’s biggest blunder was the weaponization of the world store value (U.S. Treasuries). After the invasion of Ukraine encouraged by globalist American and So my brother has long advised me against giving anything that resembles financial advice and I know he’s 100% right. The reason I’m writing this is because I’m letting my conscience be my guide, I’m intending this article to be more informational than advice. The bottom line is I believe the monetary system we use globally is a debt-based system and it depends on the continuous creation of more debt, inflation and currency debasement to keep the entire system rolling.
Since the invention of paper (Fiat) currency hundreds of years ago, the failure rate for government currency historically is 100%. Governments figure out they can promise the moon and borrow the money to pay for it because all they have to do to repay that money is print more of it.
The problem we have today is for the first time in history every single government in the world is printing money to pay their debts, accumulating trillions of dollars of sovereign debt. Throw in tens of trillions owed to citizens by their government in the future for things like medical care, pensions, etc. Then on top of that throw in trillions of dollars of personal debt of the citizens… I could go on with more examples, but basically you get the picture that the world debt of sovereign and personal entities has reached or soon will reach a point of unsustainability known as the debt/death spiral.
When my grandfather was 15 years old, he was the oldest of four siblings, and his father died suddenly. He quit school and got a job so that he could take care of the family, but the bank wouldn’t give him a chance. Two weeks after the funeral, the bank’s crew came into the house, packed up their belongings and set them out in the street, repossessing the house.
For the rest of his life, he did not care much for bankers and especially banking policy. “A banker is someone who will loan you an umbrella until it begins to rain and then they’ll ask for it back”.
The Family Rule drilled into me and I’ve hopefully drilled into my kids is “never buy a depreciating asset with borrowed money”. If you do, there’s little difference than volunteering for modern day slavery. My father taught us about being on the right side of interest, the old joke is you should aspire to sign the back of checks more often than the front of the checks.
In short, I believe the monetary system is breaking. The question is what do we do about it? Historically, farmland has been a great appreciating asset for our people in agriculture. I believe however, when even only the interest on a purchased acre of land cannot be produced by that acre, land prices are probably topped out.
What other options do we have to protect our families and our progenies wealth?
Out of curiosity, I have followed bitcoin/cryptocurrency for at least 10 years and precious metals longer. I have always been interested in how money works and how to invest and speculate to make money off of the system. I had a trading account with some more experienced buddies we called Cloverleaf Investments when I got out of college. We traded ag commodities as a group and our goal being to avoid greed and only make $400 a trade. After a few years, I was the only one left and I began trading wheat and silver with my own account. My point is I’ve followed this for a long time, and I feel obligated to alert readers because I believe something big is happening in the world’s financial systems.
Unfortunately, for you/us I’m not smart enough to figure everything out, so I’m going to tell you what I think I know to be true. Again, this is not financial advice.
The fiat/fake money system that we have today including fractional banking is all based on debt. Where does money come from? Well when someone goes to the bank and borrows money to buy a house, that money is instantly magically created. Similarly, when the government needs money to pay bills, it uses tax revenue, but somewhere along the way our politicians figured out that if they spent too much, they could just fire up the printing press.
At one point in history, governments’ money printing was limited by the physical ability for printers to print and the supply of paper and ink. Today’s politicians have no such limitations. They create money, infinite money, with the push of a few buttons. Known as the M2 money supply, the government keeps track of how many dollars are in circulation globally.
I’ll have an interesting chart for the article to illustrate my point.
Historically, the governments of the world were also limited by the amount of gold and/or silver they possessed backing their currency, precious metals. Government issued coinage historically has been a good barometer of government financial health. Every faltering empire in history has debased their coinage that’s why we have zinc pennies, dimes, nickels and the quarters are nickel/copper alloys instead of silver.
Precious metal scarcity served as a throttle, but that was removed in this country in 1971 when Nixon took the United States off the gold standard. Without this limiting feature, and the dollar reigning as the world reserve currency; our economy was allowed to expand exponentially.
The dollar replaced the British pound Stirling as world reserve currency right after World War II. That title was solidified/codified in 1974 with the birth of the petrodollar. In exchange for security guarantees from the United States, the Arab countries and really all of OPEC agreed to only sell petroleum using American dollars. They obviously hoovered up (sucked up) billions and billions of American dollars, which they turned around and used to buy U.S. treasuries that funded our government’s debt. One big circle.
U.S. treasuries became the globally accepted standard and store of wealth. The only problem is eventually debts come due, and the relentless compounding of interest eventually begins compounding on itself. As a sidenote, one of the greatest blunders of the previous administration was allowing the lapse of the petrodollar agreement.
The finance wizards of the world made the system last longer than I thought they could, but I believe we have come to the point where government debt, not only of this country, but all the countries of the world have reached a point where it cannot be sustained.
So the bottom line is the fake/Fiat debt based monetary system that we’re using I believe is faltering. Proof would be the continuously rising price of gold. As a sidenote, gold is not actually rising in price, but what is occurring is our money is being constantly debased and diluted by government money creation. Again, I will refer to you to the chart that describes the M2 money supply versus gold and silver supplies.
A global financial standards agreement known as Basal III Accords takes effect this month. One of the main provisions of this updated global financial agreement allows gold to be held as an asset by banks. Previously gold was considered a dead asset or even a liability and had been replaced as the global store about value by U.S. treasuries. Gold not being an asset in a bank vault?
Obviously, that pushed Global Central banks to store U.S. treasury notes instead of gold.
When you’re the top dog and you’ve got the world‘s largest military, you can make countries buy your debt and use your treasuries as the only store of wealth. We all must remind ourselves of the golden rule, “He who has the gold makes the rules”.
The incompetent Biden administration’s biggest blunder was the weaponization of the world store value (U.S. Treasuries). After the invasion of Ukraine encouraged by globalist American and European government officials confiscated $300 billion in treasuries owned by the Russian Central Bank. After enduring decades of devaluation of the U.S. dollar and dollar investments, this proved to the world that the United States treasuries were no longer reliable as a store of value.
The rapid rise in gold prices can be traced back to that moment. Much of the demand that accelerated gold prices is coming from global Central banks trying to get rid of their treasuries and invest in something without the counterparty risk in this case, the U.S. government.
But again, we must realize gold is not getting higher, the value of the dollars it takes to purchase gold is declining. The gold train has left the station.
So again, back to the bottom line. After my different surgeries a couple years ago, I was confined to my recliner for six months. I had plenty of time to read and listen to very talented knowledgeable podcasters covering a variety of topics. I know many of the world’s governments are turning to physical gold to store value, but I also believe however, there will be two other opportunities very soon.
The first of these is silver. Silver like gold has a 5,000-year history of being a monetary metal. In our modern society, however, silver has become a crucial industrial metal. Silver is an important component of electric cars, solar panels, etc. The global industrial use of silver has exceeded production for approximately 20 years. The biggest problem when it comes to investing in silver, is that the silver market is highly manipulated. I haven’t found anyone who can tell me why or who manipulates the silver market lower, but everyone agrees silver prices are artificially held lower. I also agree this is done using huge amount of paper silver contracts traded on the COMEX. That’s an entirely different article that I’ve already written.
Suffice to say I agree with many investors; inevitably there is a silver squeeze on the horizon.
The second opportunity stems from my belief, there is a future in digital money, specifically in the form of bitcoin. For you Normie’s, the easiest explanation I have is bitcoin is a digital store of value and is not controlled or created by any person, company or government. This is the first time in history an investment can be “front run” by common everyday ordinary people like us being purchased before the bankers, trust funds, sovereign wealth funds and Blackrock type funds of the world. I would not ever give financial advice in this column, like saying “go buy bitcoin” but I’ve come to believe that in today’s world, owning bitcoin is like buying an insurance policy. If you were one of my kids, I would advise having the goal of accumulating at least 1/10 of a bitcoin. At a current price of about $105,000 per coin 1/10 of a bitcoin would only cost 3 cow calf pairs.
I know for a fact the bitcoin ecosystem is expanding exponentially, and this explosive growth is global. There are billions of dollars (actually all currencies) being poured into bitcoin and the ecosystem around it every day. It appears to some the bitcoin ecosystem may be able to be used as a life-raft for the current failing financial system.
Marked by extreme volatility for the past 15 years, I believe since bitcoin demand is now exceeding production and supply. Volatility risk is waning at some point and soon we will see more governments, more companies, and more people utilizing bitcoin as a digital store value. At some point, probably relatively soon, I believe we will see a rapid appreciation in the value of bitcoin and some related stable coins. At this time, I would advise my kids to stay out of the volatile unregulated world, of stable coins, and cryptocurrency and stick to bitcoin only.
Unfortunately, I cannot comprehend the bitcoin universe, so I’m not the guy you should look to learn about it. I’d recommend podcaster Mark Moss. All I know is after paying attention to megatrends all my life, bitcoin adoption, and utilization is the biggest life-changing megatrend I’ve ever seen.
In a previous life I had a wise old mentor named Frank who after deep discussions like this, he would say, ”My! My! Sure are interesting times we live in.”
I’m out of time out of space and out of ink. I’d be interested in any feedback on this. Give me a call if you have questions. I love talking to all five of my Digging Deeper readers.