The trillions of dollars created at the beginning of the Great Recession in 2007 may have prevented total economic collapse but have only temporarily solved the problem.
Certainly banks and the financial system were saved from a total collapse, but what about you? The economic news lately hasn’t been very positive and the unprecedented Quantitative Easing of the Federal Reserve is now creating an environment of uncertainty in markets around the world. This environment has made it difficult for people to calculate their financial future. People are wanting to know what they should do now to fair well during the economic collapse and beyond.
There are essentially three fundamental actions from which you can choose: save, invest, or speculate.
Saving is what happens when you consume less than you produce. The extra money you have left over is savings. This is how capital is created. Building capital (the means of production) is necessary to increase productivity which in turn generates more wealth and prosperity for both individuals and a whole society. However, because the entire world is on fiat standard currencies that are constantly being devalued, there is little incentive for people to save.
The most productive people who were prudent enough to save will be punished as their entire savings are eventually wiped out. That is a big problem and major reason for the coming economic collapse. Because of the constant devaluation of the dollar and other currencies, the only way you can really attempt to save right now is to own physical gold or silver or some other commodity. But in the current economic environment that’s a bit more like speculating, which we’ll discuss below.
Investing means allocating capital into productive business in order to generate more wealth. To invest you must first have capital, which comes from savings. Investing thrives in a stable economy where government intervenes very little. Investing is much more difficult, however, when faced with inflation and government regulation and intervention that make predicting your future earnings much more complicated. And inflation, taxation, and regulation are all going to increase immensely during the next several years. So investing amid the economic collapse will be very challenging.
That leaves us with speculation. Speculation is the act of taking advantage of government created distortions in the economy. In a truly free market economy there wouldn’t be many opportunities for speculators. But we don’t have a free market economy. And unfortunately, most people despise speculators. Much of that is due to the large sums they make during economic crises, which can cause envy and makes some people think they caused the economic collapse.
And also, speculators tend to counter government actions and propaganda designed to work on the simple-minded, who then see the speculator as a villain. In truth, however, the speculator is somewhat of a hero. When everyone wants to sell he is ready to buy from them and vice versa. In this way he provides a valuable service.
So your best chance to prosper during the economic collapse will be to speculate. The trick for the speculator is knowing exactly what and when to buy and sell and to position yourself well ahead of the crowd. We’ll discuss what are shaping up to be good speculations, what to stay away from, and potential areas for massive profit in a future article.