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8/14/2019 Insights for Money & Inflation
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TodayTodays talks talk
What is MoneyWhat is Money Fiat money and hard moneyFiat money and hard money US money historyUS money history
What is InflationWhat is Inflation HyperinflationHyperinflation WhatWhats happening nows happening now
Money
Inflation
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TodayTodays talks talk
What is MoneyWhat is Money
Fiat money and hard moneyFiat money and hard money
US money historyUS money history
What is InflationWhat is Inflation
HyperinflationHyperinflation Whats happening nowWhats happening now
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MoneyMoney
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What is MoneyWhat is Money
Money has three characteristicsMoney has three characteristics Store of valueStore of value
Medium of exchangeMedium of exchangeUnit of countUnit of count
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But Ultimately, we wouldBut Ultimately, we would
saysay
Mo
ney isMoney isa claim of Humana claim of Human
LaborLabor
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TodayTodays talks talk
What is MoneyWhat is Money Fiat money and hard moneyFiat money and hard money US money historyUS money history
What is InflationWhat is Inflation HyperinflationHyperinflation Whats happening nowWhats happening now
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Money categorizationMoney categorization
Money
FiatMoney
HardMoney
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Money categorizationMoney categorization
Fiat
Money
HardMoney
Has been used toback up fiat
money until
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Old US Dollar in 1930sOld US Dollar in 1930s
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Current US DollarCurrent US Dollar
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TodayTodays talks talk
What is MoneyWhat is Money
Fiat money and hard moneyFiat money and hard money
US money historyUS money history
What is InflationWhat is Inflation
HyperinflationHyperinflation Whats happening nowWhats happening now
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Before 1933:Before 1933: US dollar is as valuable as hard money.US dollar is as valuable as hard money.
Every US citizen can exchange 25Every US citizen can exchange 25dollars with 1 ounce of Gold at any time.dollars with 1 ounce of Gold at any time.
In 1933:In 1933: Roosevelt confiscatedRoosevelt confiscated
all privately held gold.all privately held gold.
US dollar can no longerUS dollar can no longer
be exchanged with goldbe exchanged with goldby US citizens.by US citizens.
Gold standard isGold standard is
partially removed.partially removed.
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Bretton WoodsBretton Woods
Agreement, 1944Agreement, 1944
Fixedexchange rate
$35 = 1 ounce of
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In 1971, Nixon closed theIn 1971, Nixon closed the
Gold Exchange WindowGold Exchange Window
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In 1971:In 1971: Bretton Woods Agreement collapsed.Bretton Woods Agreement collapsed.
US dollar is completely decoupled withUS dollar is completely decoupled withgold.gold.
After 1971 till nowAfter 1971 till now
We are living in a world that Us dollar isWe are living in a world that Us dollar isbackedbacked by Debtby Debt, instead of, instead ofby Goldby Gold,,
which means:which means:US Fed can issue any
amount of dollar as muchas they like out of of thinair
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US Money HistoryUS Money History
1933: Gold
standardpartially
1971: Goldstandard
completelydestroyed
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TodayTodays talks talk
What is MoneyWhat is Money Fiat money and hard moneyFiat money and hard money US money historyUS money history
What is InflationWhat is Inflation HyperinflationHyperinflation Whats happening nowWhats happening now
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InflationInflation
Most people think of Inflation asMost people think of Inflation as
rising pricesrising prices, but that, but thats not quites not quite
rightright
Inflation is always a monetaryInflation is always a monetary
phenomenonphenomenon
rising pricesrising prices is only a symptom ofis only a symptom of
inflation. The real cause is theinflation. The real cause is the
devaluation of fiat money.devaluation of fiat money.
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InflationInflation
In most cases, inflation cannot beIn most cases, inflation cannot be
simply explained bysimply explained by demand anddemand and
supply inbalancesupply inbalance for goods andfor goods and
services.services.
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Inflation is
everywhere andalways amonetaryphenomenan
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US price levels 1665 toestimated 2008
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US price levels 1665 toestimated 2008
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US price levels 1665 toestimated 2008
War of1812
1812 -1814
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US price levels 1665 toestimated 2008
War of1812
1812 -1814
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US price levels 1665 toestimated 2008
200 years, Pricelevel has virtuallyno change
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US price levels 1665 toestimated 2008
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US price levels 1665 toestimated 2008
Civil War
1861 -
1866
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US price levels 1665 toestimated 2008
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US price levels 1665 toestimated 2008
250 years, Price isstill on the samelevel
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US price levels 1665 toestimated 2008
WorldWar I
1914 -1918
WorldWar II
1941 -1945
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US price levels 1665 toestimated 2008
VietnamWar 1965
- 1975
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US price levels 1665 toestimated 2008
Revolutionarywar
1776 - 1783
War of 1812
1812 - 1814
Civil War1861 - 1865
World War I1916 - 1918
World War II1941 - 1945
Vietnam War1965 - 1975
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US price levels from 1665 to1975
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US price levels 1665 toestimated 2008
Gold removedas monetary
reserve
1933
1971
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TodayTodays talks talk
What is MoneyWhat is Money Fiat money and hard moneyFiat money and hard money US money historyUS money history
What is InflationWhat is Inflation HyperinflationHyperinflation Whats happening nowWhats happening now
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HyperinflationHyperinflation
Hyperinflation is inflation that is "outHyperinflation is inflation that is "out
of control", a condition in whichof control", a condition in which
prices increase rapidly as a currencyprices increase rapidly as a currency
loses its value.loses its value. Reason:Reason:
Defeat of WarDefeat of War
Economic depression.Economic depression.
People lost confidence on thePeople lost confidence on the
government and its fiat money.government and its fiat money.
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1923,1923,
GermanyGermany
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1945 -1945 -
19461946HungaryHungary
http://upload.wikimedia.org/wikipedia/commons/0/0e/Inflaci%C3%B3_utan_1946.jpg8/14/2019 Insights for Money & Inflation
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Hyperinflation inHyperinflation in
Zimbabwe, 2008Zimbabwe, 2008
CPI isCPI is
231 000 000%231 000 000%
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TodayTodays talks talk
What is MoneyWhat is Money Fiat money and hard moneyFiat money and hard money US money historyUS money history
What is InflationWhat is Inflation HyperinflationHyperinflation WhatWhats happening nows happening now
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WhatWhats happening now in ours happening now in our
world?world? Are we living better than peopleAre we living better than people
of Zimbabwe?of Zimbabwe?
We are living a time of deceit.We are living a time of deceit.Gov./Bankers can deprive us ofGov./Bankers can deprive us ofour wealther byour wealther by invisible taxinvisible tax--
Inflation.Inflation. Remember: Fiat money is notRemember: Fiat money is not
money, they are paper. Maybemoney, they are paper. Maybe
after one night, you will loseafter one night, you will lose
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Paper moneyPaper money
eventually returnseventually returns
to its intrinsicto its intrinsicvalue... zero.value... zero.
-Voltaire (1694-Voltaire (1694
-1778)-1778)
No matter how politiciansNo matter how politicians
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No matter how politiciansNo matter how politicians
plead that they areplead that they are
protecting dollarprotecting dollar
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by a continuingby a continuing
process of inflation,process of inflation,
governments cangovernments can
confiscate, secretlyconfiscate, secretlyand unobserved, anand unobserved, an
important part ofimportant part of
the wealth of theirthe wealth of theircitizens.citizens.
JohnJohn
MaynardMaynard
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US National DebtUS National Debt
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US National DebtUS National Debt
US National DebtUS National Debt
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US National DebtUS National Debt
300 years
for the 1sttrilliondebts
4.5 months
for thelatesttrillion
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Credit injection fromCredit injection from
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Credit injection fromCredit injection from
Central banksCentral banks USUSs 700 billions 700 billion bailout planbailout plan
Not include 85 billion for bailing outNot include 85 billion for bailing outAIGAIG. Freddie Mac & Fannie Mae. Freddie Mac & Fannie Mae
South Korea has given out $100South Korea has given out $100billionbillion
Russia has spent $120 billion.Russia has spent $120 billion.
Germany has earmarked $65 billion.Germany has earmarked $65 billion. United Kingdom has pledged $50United Kingdom has pledged $50
billion so far.billion so far. Sweden just injected $200 billion toSweden just injected $200 billion to
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With so manyWith so many creditcreditinjected into market,injected into market,
what would you expectwhat would you expectto happen in future?to happen in future?
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