My conversation with Arnold

While minding my own business, a colleague of mine engaged me in a conversation about real estate, commodities, investments and the like. He noticed that I was holding in my hand "Guide to Investing in GOLD and Silver" by Mike Maloney. His reaction was "Isn't the idea of holding gold and silver, a thing of the past?", I sheepishly smiled and began to inquire as why he thought so. "You aren't just that liquid when you have those metals in your portfolio!" "You mean that you would rather hold CASH or FIAT Currency to secure your wealth?", I insisted. He nodded, to which I replied "And what makes CASH secure?" He quickly answered "Since CASH is always backed by GOLD then I would rather hold cash!"

You know what happens next. We entered into a discussion on how ALL of the world's currency is no longer backed by anything but thin air. HE WAS SHOCKED. It hit him like a crane to a building that he quickly grabbed the book that I was reading and started perusing the pages.

That is part of the problem, especially here in the Philippines. I would like to announce officially that our monetary system is FIAT and NOT under a gold reserve. Neither is the US Dollar for that matter which in 1971 President Nixon signed a proclamation that the US Dollar would no longer be 'redeemable in Gold'. In other words, all of this so called CASH in the system is backed by the goodwill and credit of it's government.

So if you think that your cash is KING, then think again. When Cash Crashes, the precious metals do an accounting of all the mismanagement, mistakes, greed of governments in printing money irresponsibly.

Where we in a gold standard today, life would be pretty much balanced and the greed of politicians would be tempered since it is very difficult to print gold versus printing something on paper and declaring that it has innate value because they did so.

The search to hold gold and silver in the Philippines is a relevant task that we, the people of this young republic should aspire for. Afterall, aren't those foreign mining companies grabbing our gold before the poor JUAN is able to get his hands on it.

Spread the word and refer your family and friends to this blog, that they may learn the rudiments of the Philippine monetary system, which is NOT vulnerable to the coming worldwide economic crisis.