Asset or Money?

What is more valuable? – Asset or Money?

Well, for most of the people Money is more valuable than the Asset but it is not the true answer. In reality, Asset is more valuable than Money.

The USA Government and the governments of various part of the world are now truly printing money out of the thin air only.

Recently, US Government (Federal Government) has printed around US $ 1.45 Trillion (Yeh… That’s Trillion) out of the thin air only.

How did US Government printed Money?

Well, see Federal Reserve Bank of USA has issued US $ 1.45 Trillion of Treasury Securities and Federal Government of USA has bought it. In the normal economy, if Federal Reserve issues securities, Other countries of world such as India, China, Japan, Private Investors & Corporates buy those securities. But this time, Federal Government has bought all of those securities and this is how US Government has printed money out of the thin air only.

There is not as such demand in the world for this much amount of US Treasury securities. So this time US Federal Government itself has bought all of those treasury securities and this is how they have printed new money out of nothing.

According to Economists & Intelligent Investors, Central Banks all over the world have printed huge amounts of money, and the real economy is not strong enough for all this money to be absorbed. So this newly printed is going towards the assets such as stocks (Businesses) & Real Estate and that’s why we are witnessing the valuation hike in stocks & real estate all over the world.

Printing Money is a mistake what these government are doing. It will give only short-term pleasure, but there is a long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road.

The American Bond market is already beginning to go down dramatically as people realize that the American government has to sell huge amount of bonds, and secondly, there is going to be inflation, serious inflation as it was always in the past when you had governments printing huge amount of money (Germany Hyperinflation).

In short, Money which is now Currency will be not much valuable. Asset will be valuable than money. If you own any Asset, any means any than don’t sell it for money. Because every asset of this world will be much more valuable than the Money in the future.

Say for Example, if you own a Blog which is making US $ 10 per month for you than don’t sell it for even thousands of dollars. Because money will loose its value over the time. Instead hold that Asset for long time horizon, it will give you and your future generations Financial security.