The race is ON for a new reserve currency! What will it be? Will it be gold? Bitcoin?
We all know we are currently on a fiat monetary system. Fiat currency is defined as “government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.“
This basically means our government (and others around the world) can print their own money at will. They can print as much as they want and is approved by their respective governments.
The U.S. wasn’t always on a fiat currency. Once upon a time, the country was on the gold standard. The definition of the gold standard is the system by which the value of a currency was defined in terms of gold, for which the currency could be exchanged.
This all changed in 1971, when President Richard Nixon removed the dollar off the gold standard. The result of this move? The U.S. cold print as much money as they wanted, with no limitations or restrictions.
The result? Huge amounts of dollars printed:
The REAL Problem With Printing Money
There’s another problem with printing cash: sticking to a budget is not as urgent anymore.
Think about it.
If there’s a budget shortfall, you can simply print more money to cover the difference, which the country has been doing for years. This is partly the reason for so many budget deficits.
Each year, the country spends more than its bringing in. This in turn causes the federal deficit to rise.
The federal deficit is out of control. We currently have a $30 TRILLION budget deficit. It is believed we cannot pay back this debt, so a currency reset is in the works. While no one knows for sure what it will entail, some believe the reset will consist of a currency backed by an asset, such as gold or bitcoin.
Danger Ahead: A New Reserve Currency
Yes, we may have a new currency, but what impact will it have on our economy?
It could have a DEVASTATING impact. Ask yourself the following question: If we go off the fiat system, we will NOT be able to print money at will. HOW WILL WE PAY OUR BILLS?
There are three ways the U.S. tends to generate revenue:
- One way the USA generates revenue is by issuing bonds. The majority of bonds are purchased by other countries, such as China and Japan. For example, The U.S. debt to China is $1.10 trillion as of October 2019. But what if these countries decide to stop buying our bonds?
- The next response to the debt we’ve been hearing is to raise taxes on the rich and corporations. While that might work short term, there’s nothing that can stop these companies from closing up and relocating OUTSIDE of the United States. Remember: they’ve done it before. Look at all the products you currently own that are made in China?
- If the U.S. can’t get countries to buy bonds or have companies pay more in taxes, what is left? Raising taxes on the goods and services that YOU use. This could lead to more inflation and even more trouble for the economy.
These are all Band-Aids. This doesn’t fix the problem. The best way to generate revenue (and decrease budget deficits) is to increase revenue by producing goods and services.
The U.S. is primarily a consumer nation. It’s critical we get back to producing goods and services. This is our best option for getting out of this mess.
What We Must Do
There’s a big race to see what asset will become the new reserve currency. Unfortunately, people don’t think about what happens AFTER that change. If there are large increases in the prices of goods and services, how will you afford to purchase them? I’s critical we protect ourselves. This means being proactive and aggressive. While having gold, silver, and cryptocurrencies is good, the ultimate key in the equation is to have money still coming in. In other words, create a business and establish multiple streams of income. You must become a producer.
Being a producer is a great way to protect yourself against inflation. As a producer, you have control over pricing. As inflation increases, you can increase the prices of your goods and services along with it. Here’s some more info on being a producer and generating passive income.
The world is changing right before our eyes. It’s critical we stay abreast of what’s going on and prepare accordingly. If a person is relying on social security, a pension, retirement savings or a job and one source of income, now is the time to get busy. Don’t wait on the currency to reset to do something. Start now before it’s too late.
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