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Thursday, October 9, 2008

Airelon's Thoughts Regarding the Gold Standard

"You cannot tie the infinite to the finite, and not expect problems." - Myself

Sometimes, when we run into various problems throughout our lives, we indulge in a bit of nostalgic remembrances. We think about happier times in our lives. We think about the way things 'used to be'. We reminisce over 'the good old days'. And nostalgia has a wonderful way of glossing over very real problems.

At times, I think folks may do the same thing when it comes to the money supply. They find the very real problems that a fiat currency brings? And they forget about the problems that a hard asset currency brings.

So what are my problems with the Gold Standard? ...(Video Included)

As well, at times, you'll hear the phrase "Every country that has ever used a fiat currency fails."

That is simply incorrect. Nations rise and fall. The currency it uses is merely a side note. In addition, England has existed as a country for over 1,000 years. They use two different fiat currencies.

As well, at times, you'll hear the charge "Fiat currencies have nothing behind them but paper". This, technically ... is not true. They are backed, not only by faith and credit of the issuing government? But also by that governments assets. What they actually have, in the way of wealth. It can become an accurate charge, if too much money is printed. But it is not necessarily true, simply because one has a fiat currency.

Now, that being said, I do believe that during times of inflation? Gold is a great investment. It hedges yourself, against inflation. But remember, during periods of low inflation? Gold can sink in value tremendously.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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