Investing In Gold And Silver For Capital Preservation And Appreciation

The Fiat System Has Effects

A fiat system is formed of fiat money which has value only through government regulation or law. Within a fiat system, money have no intrinsic value, meaning that they are supported by no physical commodity. The value of fiat money, also known as fiat currency, resides in its ability of being exchanged for goods or used for taxes payment. As a result, systems based on a fiat currency are extremely unstable because they generally go down once the issuing government refuses to continue to guarantee their value through taxation.


A fiat system is formed of fiat money which has value only through government regulation or law. Within a fiat system, money have no intrinsic value, meaning that they are supported by no physical commodity. The value of fiat money, also known as fiat currency, resides in its ability of being exchanged for goods or used for taxes payment. As a result, systems based on a fiat currency are extremely unstable because they generally go down once the issuing government refuses to continue to guarantee their value through taxation.

The fact that no constraints are placed on the amount of money being issued within a fiat monetary system can be seen as a major flaw. Based on this, economies have the tendency to expand the supply of money to satisfy population requirements. On the long term, this can set off economical devaluation and eventually financial collapse. It is generally agreed that in a fiat monetary system the value of money is essentially based on trust. But what happens once that trust is gone? Well, the “Tinkerbell effect” fades away, meaning that the value of money no longer exists. This can produce much disappointment.

Being the foundation of most of the major economies, fiat currencies amplify the pervasive threat of hyper-inflation. As an example, governments which have already experienced the fiat money inflation, fought very fiercely in order to put back together an operational and stable economical structure.

In spite of the unstable nature of the fiat system, gold is widely recognized as a safe investment since it has always passed the test of endurance. This yellow metal is seen as a great method to avoid fiat money inflation, with its value increasing in time. What makes this possible is the fact that gold prices increase significantly when the value of fiat money diminishes.

You can decide to buy gold either as a way to insure yourself against any fiat currency crises or to extend your portfolio of assets. Irrespective of the reasons you may have, listen to what the experts say and make sure you choose pieces of physical gold.Furthermore, it is recommended that you visit the shops of various dealers before making the actual purchase. This way you will make sure that you get the best price.

In times of recession, buying gold can help you. Learn from professionals how to do it!

, , , , , , ,