The Paper Money is Dying

The Paper Money is Dying

According to many economists, it is now “The Death of the Paper Money”.

This is because of the money printing activity of central banks and governments from all around the world, the paper money is losing its purchasing power day by day and becoming worthless.

In past 2 years only the US Government has increased its monetary base from US $ 800 Billion to literally above $ 2 Trillion. Of course,the asset prices shoot up but the value of money is going down.

Take the example of 1920s – The German hyperinflation scenario. The German government has increased its money supply and almost after 2 years, people lose faith on the currency and the currency became worthless.

You can see in the above picture that the German woman is using bank currency notes instead of coal for heating purpose. This is the end result of printing enormous money out of thin air.

If USA won’t absorb this liquidity soon than sooner or later people will lose faith on the US Dollars and the US Dollar will become worthless.

This is the era of fiat money means the money without any gold back up. Before 1971, the money was used to be backed by the gold which really used to keep inflation under control. But today the situation is different. After 1971, when the President Nixon removed the Gold Standard, the money stop being money and became currency – a piece of paper without any intrinsic activity.

In short, the rules of money have been changed and you need the future generation real financial knowledge to get rich and financially free. You can not become rich and financially free by using the old rules of money.

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