It's imperative for us to recognize how to financially survive a world of irresponsible monetary policy and excess debt. With fuel prices, food prices, home prices, and stock markets all at or near all-time highs many of us wonder if it'll ever come crashing down or will everything soon be out of financial reach for the middle class? For the answer, we simply must explore the reasons why prices are so high and what we can do to insulate ourselves from further deterioration of our wealth.
First, for anyone living outside the United States and earning income in your countries designated currency we need to look at how it stacks up against the "world reserve/ trade" currency the U.S. dollar. For all my fellow Canadians I'll use the loonie, a great example due to its perceived strength. I remember my friend Jim Rickards saying, " the only thing backing fiat currency is confidence once lost, it's impossible to get back." Canada is on a very slippery slope, low-interest rates, high cost of living and food prices and no room to raise interest rates without causing a recession. I've illustrated in a previous article the strength or weakness of the Canadian dollar comes from the Bank of Canada's ability to manage the overnight lending rate (currently 1.75%) typically if an economy is running too hot (high prices across the board) it is BoC's job to hike rates and strengthen the loonie. Unfortunately, the BoC cannot normalize interest rates due to average Canadian households being overburdened with debt. ($22K average per person) Without those rate hikes, the Canadian dollar will continue to weaken against the U.S. dollar causing higher and higher inflation. The impact will be devastating for fixed income households that simply cannot keep up with the cost of living not to mention the domino effect on housing prices.
Consider the conundrum the bank of Canada is currently in, our dollar is losing value against U.S. dollars causing us to pay more for everything we import including fuel. The counter to that is to raise rates and strengthen our currency but that will cause a recession and most likely a housing market collapse. They can leave rates the same, delay the inevitable and watch the value of our loonie slowly erode ultimately causing further inflation and most likely force the BoC's hand into more dramatically hiking rates. Lower interest rates, not an option, that will just accelerate the loonie's decline and risk a full-blown loss of confidence aka Venezuela style collapse.
The reality is, all central banks are stuck, the global debt loads are at unseen levels and normalizing interest rates isn't an option. We will see a monetary reset sooner than later if you are interested in finding out more about how that unfolds I'd recommend reading James Rickards book "The Death of Money" available on Amazon.
We all need to regain control of our money personally removing the Bank of Canada's privilege of managing the value of our currency in one simple step. Open a physical bullion account with IGV and convert a percentage of your weekly/biweekly pay cheques into physical bullion implement your own personal gold standard. Focus on adding ounces to your overall portfolio as a form of non-currency based liquid asset. This will help to offset the loss of purchasing power while growing a golden nest egg of liquid wealth that can be accessed instantly in a time of need.
Visit www.internationalgoldvault.com today and find out more about how you can get started today. There are no minimums to get started, an independent trading platform available for those interested in trading physical gold, silver, platinum, and palladium in one-ounce increments. Financing available!