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A Look At Today’s Economic Turbulence And What You Can Do In Response

Many investors are putting their money into hard assets right now, but why? What is the nature of the economic turmoil and what do we do in response to it? If you find yourself asking these questions, but aren't sure as to the answers, this article is for you.


Many investors are putting their money into hard assets right now, but why? What is the nature of the economic turmoil and what do we do in response to it? If you find yourself asking these questions, but aren’t sure as to the answers, this article is for you. There is a lot of news and press on the economy right now, but how do we contextualize all of this information?

We all know of the recent recession in 2008 caused by the collapse of the housing bubble. But was the recession the beginning or the end of our economic troubles in the 21st century? Unfortunately evidence exists that suggests the recession of 2007-2009 was just a glimmer of what’s to come. The economy faces unprecedented challenges with the US debt larger than ever and inflation possibly on the horizon.

One of the biggest challenges that faces the economy today is the United State’s massive debt, which they are paying with in fiat currency. A fiat currency is a currency which has its basis in the government. Basically a government mandates that its currency be regarded as legal tender but it’s not tied to any hard assets or anything with intrinsic value. Currencies like this can be dangerous as they can lead to governments irresponsibly spending money.

Eventually all of this irresponsible spending comes to a head and the value of every dollar begins to become undermined. This is particularly true when governments begin to use their fiat currency to pay for their debt. This is what’s called debt monetization and it can often lead to a series of defaulting IOUs that will cripple a debt-based economy.

The end result of all of this can often be inflation or hyperinflation, and it’s a trend that we’ve seen occur all over the world. It has taken place both in ancient history and very recent history, as many countries have undergone this cycle in the 21st century. Most economies revert to hard assets during hard times like this, which is why many people are placing their faith in precious metals and gravitating away from market-dependent investment funds.