It’s nearing the end of 2022, and the tide is turning towards assets not backed by fiat currency. People all around the world are starting to question the true sense of the words – what is fiat currency and why am I so invested and dependent on it? Does it really have value, and what will its value be in 10 years’ time? These are important questions to ask; as we continuously see more of our US dollar being printed into oblivion, the next question remains: who is paying for all this extra money?
Inflation – possibly our biggest threat
When it comes to the value of our dollar, many people do not acknowledge that this value goes up and down. In the United States, we are used to be the “head honcho” in the fiat currency space, so our currency’s value has not swayed much since we got off the gold standard. Since other countries rely on our dollar to value their own, we were currently in the safe zone. This was all hindered by the massive money printing and country debt we decided to take on. $35 trillion dollars in debt and the money is still being printed. This all comes crashing down in one main fashion: inflation. This means that the cost of our goods, real estate, food, gas, etc skyrockets and the value of the money we hold in our wallet and bank account decreases. As the wedge between what the average American can afford and the money they currently have gets bigger, more people are forced into poverty and are ironically questioning: why can’t the government just print more dollars and give them to me?
Petrodollar = United States dollar? Not for long!
One of the main reasons the US dollar has been the most valued currency in the world for so long is because it is the worldwide petrodollar. This means that anytime any country wants to purchase oil from another country, they must first exchange their currency for United States dollars. This is trillions of dollars of business done in our home currency, forcing the demand for it to remain high. But in 2022, the petrodollar took a sinister turn for Americans; Russia, China, and India, over half of the world’s population, decided they’re no longer going to use the United States dollar as the petrodollar: they’re turning to towards the Chinese yuan now. So what happens when the rug is pulled beneath us and the demand for our United States dollar is completely gone? The value of each dollar, now that there are so many, turns to zilch. This is currently being played out before our very eyes.
What can be done about this?
In the world of finance, when something goes wrong, it usually means the rise of something else to take its place. As more people are concerned about their wealth being eaten up by the devaluation of their currency, we are currently seeing the demand for precious metals increase, as mentioned at this page. Precious metals have stood the test of time and have instrinsic value which is necessary to consider when investing in something. A great option for retirees is to rollover their current retirement account into a precious metals IRA because of the strength of gold and silver and the tax benefits that come with an IRA. This saves you from the issue of currency devaluation and the entire stock market that is based on it. Historically when the stock market decreases, the value of gold and silver increase. It’s best to do your research and weigh the pros and cons of what you’re currently invested in, and how to diversify out of the US dollar and companies backed by it.