What Happened to MONEY?
Today one of my clients brought me a VW Beetle for attention. That's not so unusual since I work on cars and have had thirty odd beetles over the years.
The unusual thing about this one is that the first owner kept a little black book in which she recorded everything that was done to the car ... even a record of every liter of fuel poured in.
Here are some interesting extracts from the 'Little Black Book':
The car was delivered to the good lady, brand spanking new, on the 17th of January 1973 with the original invoice for a price of R1942. It was delivered with ONE RAND petrol in the tank and this amounted to 11.3 liters. (to convert Rand to US dollars divide by 7)
With petrol now around R8 per liter I was intrigued to work out just how much things have gone up in price, and how my portfolio would look if I had invested in three commodities back then.
So, R8 back then would have bought 90 liters of petrol. Today 90 liters will cost around R720. That means the price has gone up 90 times or 9000 %.
At that time an ounce of gold was R30. Today it is touching R1200. That is 40 times or 4000%
A property which was bought then for R30,000 is now valued at R1,200,000. That is 40 times or 4000%.
If, instead of buying a Beetle, the good lady had invested her R1942 in a stash of petrol it would now be worth about R174,000. (and walking would have been beneficial to her health!) Meanwhile the Beetle, being in very good condition, has just changed hands at R25,000.
The property on the other hand may have required a deposit of 10% ... R3000. Then bond repayments would have cancelled the debt over 20 years. So in 1993 the property was fully paid and now constituted rent free accommodation for the past 15 years. Add that to the 4000% increase in 'value' and it looks like a pretty good investment.
The issue here is not so much about which commodity would have been the best investment ... and does looking back hold a clue with regard to what course to follow from here ... but about: What Happened to MONEY?
Is there a good reason for the price of goods to go up relentlessly?
Of course there is! It is precisely this scam which enables the 'haves' to acquire wealth at the expense of the 'have nots'. It begins with the bankers and financial institutions who, through the mechanism of the 'Fractional Reserve Banking System' are able to create 'money' which does not exist and then 'loan' it to people at interest. The inexorable rise in prices is the result because this increase in the money supply is inflationary and will tend to push prices up as it is released into the marketplace.
The person who is able to secure title to real assets and build capital using money which is constantly being devalued by the unscrupulous actions of the banking cartel will be able to become wealthy since the assets he acquires will generally reflect the current (devalued/inflated) price at any given time. The person who is only able to generate enough income to cover basic every day needs such as food and shelter is constantly facing the erosion of his buying power. On the other hand this erosion of buying power is reflected in the increased 'value' of assets in money terms. The first to benefit in the acquisition of real assets at the lowest prices are, of course, the bankers while the next in line are the already rich ... who simply get richer.
The point of the little story above is that the petrol, the once of gold, and the property have not changed. It is the buying power of money that has changed.
Had the good lady kept a R100 note from back in '73 it would only buy her R100 worth of goods today. And that would be around 4000% less than back in '73.
That change, and the degree of change reflects the extent of the dishonesty ... perhaps 'downright theft' is a more accurate label... perpetrated on the rest of us by the moneymasters.
The unusual thing about this one is that the first owner kept a little black book in which she recorded everything that was done to the car ... even a record of every liter of fuel poured in.
Here are some interesting extracts from the 'Little Black Book':
The car was delivered to the good lady, brand spanking new, on the 17th of January 1973 with the original invoice for a price of R1942. It was delivered with ONE RAND petrol in the tank and this amounted to 11.3 liters. (to convert Rand to US dollars divide by 7)
With petrol now around R8 per liter I was intrigued to work out just how much things have gone up in price, and how my portfolio would look if I had invested in three commodities back then.
So, R8 back then would have bought 90 liters of petrol. Today 90 liters will cost around R720. That means the price has gone up 90 times or 9000 %.
At that time an ounce of gold was R30. Today it is touching R1200. That is 40 times or 4000%
A property which was bought then for R30,000 is now valued at R1,200,000. That is 40 times or 4000%.
If, instead of buying a Beetle, the good lady had invested her R1942 in a stash of petrol it would now be worth about R174,000. (and walking would have been beneficial to her health!) Meanwhile the Beetle, being in very good condition, has just changed hands at R25,000.
The property on the other hand may have required a deposit of 10% ... R3000. Then bond repayments would have cancelled the debt over 20 years. So in 1993 the property was fully paid and now constituted rent free accommodation for the past 15 years. Add that to the 4000% increase in 'value' and it looks like a pretty good investment.
The issue here is not so much about which commodity would have been the best investment ... and does looking back hold a clue with regard to what course to follow from here ... but about: What Happened to MONEY?
Is there a good reason for the price of goods to go up relentlessly?
Of course there is! It is precisely this scam which enables the 'haves' to acquire wealth at the expense of the 'have nots'. It begins with the bankers and financial institutions who, through the mechanism of the 'Fractional Reserve Banking System' are able to create 'money' which does not exist and then 'loan' it to people at interest. The inexorable rise in prices is the result because this increase in the money supply is inflationary and will tend to push prices up as it is released into the marketplace.
The person who is able to secure title to real assets and build capital using money which is constantly being devalued by the unscrupulous actions of the banking cartel will be able to become wealthy since the assets he acquires will generally reflect the current (devalued/inflated) price at any given time. The person who is only able to generate enough income to cover basic every day needs such as food and shelter is constantly facing the erosion of his buying power. On the other hand this erosion of buying power is reflected in the increased 'value' of assets in money terms. The first to benefit in the acquisition of real assets at the lowest prices are, of course, the bankers while the next in line are the already rich ... who simply get richer.
The point of the little story above is that the petrol, the once of gold, and the property have not changed. It is the buying power of money that has changed.
Had the good lady kept a R100 note from back in '73 it would only buy her R100 worth of goods today. And that would be around 4000% less than back in '73.
That change, and the degree of change reflects the extent of the dishonesty ... perhaps 'downright theft' is a more accurate label... perpetrated on the rest of us by the moneymasters.