Bitcoin Will Pass $1 million in 5 years

Dear Reader,

In 1964, the U.S. government took our silver coins and turned them into base metal coins. 

That is why, today, you see a copper tinge along the grooved edges of coins. While the grooves prevented people from shaving the edges of the coins, the government was metaphorically shaving the value from the coins by taking the silver out of them. After 1964, no one shaved coins because coins were no longer inherently valuable.

I was in high school in 1964 and immediately began gathering as many old silver coins as I could get my hands on. I didn’t really know why I was doing this; I simply felt compelled. I knew that something was changing and that I had better hang on to real silver rather than coins. 

Years later, I found out that I was responding to Gresham’s law. Gresham’s law states that when bad money enters into circulation, good money goes into hiding. 

I was responding to a change in the money system. I was exchanging bad money for good money and putting the good money—the silver coins—into my coin collection. I still have some of those same silver coins today.

Today the shaving and debasing of our money continues, just not in physical form. Since money is invisible, a derivative of debt, bank robberies by bankers have become invisible. This means most people cannot see how their banks steal their money.

Gresham’s Law

Gresham’s law states that when bad money enters into circulation, good money goes into hiding.

My rich dad said… 

Gresham’s Law has been in effect since humans began valuing money. 

Back in Roman times, people used to clip silver and gold coins. Clipping coins meant that people would shave a little bit off the coin before handing it to someone else. So the coin began to lose value. 

The Roman people were not stupid and soon noticed that the coins were lighter. Once the Roman people knew what was happening, they hoarded the coins with high silver and gold content and spent only the lighter coins. 

That is an example of bad money driving good money out of circulation. To combat this clipping of coins, the government began distributing coins with reeded, or grooved, edges. That is why coins of value have the tiny grooves on the edge. If a coin had the grooves filed down, a person knew the coin had been tampered with. 

Ironically, it is the government that does the most clipping of the value of our money.

People who do the hardest work have the hardest time getting ahead due to the effects of Gresham’s Law. 

Since money has ever-declining value, a financially wise person must constantly seek things that do have value and can also produce more and more debased money. If you don’t do that, you fall behind financially over time rather than get ahead.

Fake Money

Presently, the Fed and the Treasury are trying to stop deflation. Deflation is much worse than inflation, and much harder to stop. That’s why we’re seeing tactics that are successful and we will return to an inflationary economy.

The primary cause of inflation is the government printing money, which increases the money supply. Inflation is caused by the purchasing power of your money going down as more and more dollars flood the existing pool of money, which means prices of many essential products, such as food, fuel, and services, go up as more dollars chase the same amount of goods. 

Inflation is often called “the invisible tax,” which is hardest on the poor, elderly, savers, low-income workers, and fixed-income retirees.

Inflation makes the rich richer, but it makes the cost of living more expensive for the poor and the middle class. This is because those who print money receive the most benefit. They can purchase the goods and services they desire with the new money before it dilutes the existing money pool. They reap all of the benefits and none of the consequences.

If on the off chance the economic stimulus packages don’t work this will lead to printing massive amounts of money which in turn lead to hyperinflation.

Hyperinflation, if it were to happen, can be just as bad as a depression. This 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. If that happens the world economy will collapse. That is what our leaders fear most.

God’s Money

I have started both a gold mine and a silver mine—the gold mine was in China, the silver mine in Argentina. Both were sold to the public via IPOs, Initial Public Offerings, on the Toronto Stock Exchange.

Before we could “go public” we had to prove we had found real gold and real silver. We had to physically verify there was gold and silver in the ground… and that our company had the legal right to own, mine, and sell the gold and silver.  We also had to prove we had the right to sell shares in the company, via an IPO. 

So, I know that real gold and silver were here when planet earth was created. I saw real gold and silver in the ground. These are assets that come directly from the earth. That is why I state gold and silver are God’s money. 

Gold and silver will be here long after fake money, government money, people’s money, and people are gone.

Today, I prefer to trust God’s money, real gold and silver. I do not invest in fake gold or silver, aka exchange-traded funds—paper gold and paper silver. 

I do not trust the elites who run our governments, banks, or Wall Street. I do not trust anyone who prints fake money. 

I own gold and silver because I trust real gold and silver. I trust God’s real money.  

People’s Money

Bitcoin was created in 2009 and when it first broke onto the monetary landscape it sounded like science fiction. Something created by an anonymous person known as Satoshi Nakamoto operating outside the traditional banking system.

That’s why I call Bitcoin and other cryptocurrencies “People’s Money” because they are now challenging the hegemony of the U.S. dollar and other fiat currencies outside of the system. 

As cryptocurrencies evolve, the power of the banking system will lose its grip on the financial freedom of the world.

I believe that people’s money is such a threat because many cryptocurrency miners and developers are driven by an intense desire, a passion (and in some cases a hatred) to bring down the system and the invisible leaders that R. Buckminster Fuller called the “Grunch of Giants”.

Today, as I write this, the price of Bitcoin and other cryptocurrencies are rapidly rising. Just a few days ago it hit an all-time high at $63,000, and some experts are predicting a single Bitcoin will be worth $1.2 million within 10 years. 

There’s a lot of excitement centered around Bitcoin and other cryptocurrencies right now and a lot of that is driving prices up. And don’t get me wrong: I am a big believer in cryptos including bitcoin.

But here’s a word of caution: When there is madness and everyone is thinking about getting rich quick in the market, it’s usually just a matter of time before many people lose everything. 

Often this is because people start investing in the markets with borrowed money, instead of first investing in their education and experience. When that happens, many people sell in a panic.

Of course, that is when educated investors really become wealthy, profiting off the madness of others. 

The problem with uneducated investors is that they do not understand real bear markets or real bull markets, so how would they know what a market crash and a bear market feels like, especially if it goes on for years?

That is why the new area of investing, crypto investing, is so dangerous without education. 

Regards,

Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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