How To Prepare For The Brave New World
Citizens across the globe are experiencing a brave new world in the face of the coronavirus outbreak. You have to start thinking that this pandemic is the death of the old economy.
By failing to teach about money and to expand ﬁnancial intelligence in school, the system creates adults who are unprepared for this new world. Billions of adults across the planet do not have a personal ﬁnancial statement, cannot read a business’s ﬁnancial statement, and do not know the ﬁnancial condition of their country. This is a breakdown in educational integrity.
Historically, when the gap between the rich and everyone else grows too wide, revolutions occur. That is my concern. Revolutions occurred in Russia, Cuba, and Venezuela when the gap between rich and everyone else got too wide.
The world is changing rapidly. The school systems are not. Schools continue to teach people to leave school in search of a high-paying job. This is financial suicide. Always remember: A job is not an asset, nor is money an asset, nor is a home an asset. The worker’s savings in their retirement plan is only a source of cash for true capitalists.
When markets crash, as they always do, the workers lose, and the capitalists win.
If the economic stimulus packages don’t work this will lead to printing massive amounts of money which in turn leads to hyperinflation.
When inﬂation fails, many countries have suﬀered hyperinﬂation, often fueled by a hyper-printing of money. Hyperinflation if it were to happen can be just as bad as a depression. This has happened in Zimbabwe where it reportedly takes a billion Zimbabwean dollars to buy three eggs. If the unthinkable happens and the United States goes into hyperinflation it means the death of the U.S. dollar.
Printing money has never produced sustainable prosperity. Printing money has always caused poverty for those who work for money. The year 1971 was the start of the ﬁrst global “money printing.” Today, the entire global banking system runs on printed money. How long can the U.S. and the world continue to print fake money?
Understanding the relationship between bailout money and inflation is one example of the importance of knowing history: By knowing a little history, you can understand how fast your savings can lose value.
I’m F*k’d (IMF)
In 1944, just as World War II was about to end, a meeting of international banking leaders was held at a resort in Bretton Woods, New Hampshire—the United Nations Monetary and Financial Conference. This conference resulted in the creation of the International Monetary Fund (IMF) and the World Bank.
While the popular perception is that these two agencies were created for the good of the world, they have actually resulted in a lot of harm—foremost of which is the spread of a fiat monetary system throughout the world.
These agencies are extensions of the Federal Reserve and other European central banks. The IMF and World Bank required the world’s banks to shift their money to fiat currency, currency not backed by gold and silver, similar to pre—World War II Germany’s currency. In other words, the United States, the IMF, and the World Bank began exporting Germany’s type of monetary system, wheelbarrow money, to the world.
But I call the IMF “I’m F*ck’d” because there will have to be an IMF bailout. The monetary system has been blown apart so badly that a foreign country will have to step in and give the U.S. more fake money—special drawing rights (SDR). An SDR is essentially an artificial currency instrument used by the IMF and is built from a basket of national currencies.
So as long as the U.S. continues to print fake money, we are in big trouble.
Rather than allow this crisis to be a bad thing, use it as a motivator for something good. Teach yourself and teach others to think for themselves, rather than wait to be told what to do.
We truly are on the edge of a brave new world and a new world economy. This crisis is simply the end of an era. It is also the birth of a new era, a new economy.
Prepare for the Bad Times and You Will Only Know Good Times
When I was in Sunday school, I was told a story about a pharaoh of Egypt who had an unsettling dream. In his dream, he saw seven fat cattle being eaten by seven skinny cattle. Disturbed, he searched for a person who would interpret his dream. Finally, he came upon a young slave boy who told him his dream meant the world would have seven years of abundance followed by seven years of famine. The pharaoh immediately began preparing for a famine, and Egypt went on to become a powerful nation, feeding that part of the world.
I am afraid my generation and their kids are not prepared for the economic decline, a depression that I see coming. If a person has only known an expanding economy, he or she may not be prepared for life in a deflating or hyperinflating economy.
After reading Dr. Fuller’s book Grunch of Giants in 1983, I began preparing for today’s financial crisis. Today, my wife and I, our company, and our investments continue to prosper simply because we are always preparing for bad times.
The good news is that we are entering a new era of humanity, an era of unlimited abundance and opportunity. Advances in technology increase intelligence and reduce the cost of that intelligence. Technology decreases financial risk, reduces prices, brings wages down, and opens up worldwide markets. The good news is: Technology makes it easier to be entrepreneurs.
This is the best of times for those willing to study, learn quickly, work hard, and not join the chorus of negative people. Learn from the past to succeed in the future. This is your time to become rich—if you want it to be.
Editor, Rich Dad Poor Dad Daily