What’s next for gold?

stacks of gold bars

What’s next for gold? Who knows? The only certain thing is that you shouldn’t be getting advice from right wing nuts and Tea Party nuts who tried telling you the world was coming to an end. Did you see all those stupid commercials on Fox News when Glenn Beck was selling this stuff?

Here’s a good article that takes a hard look at where gold might go next after crashing the past three years. If you’re thinking of investing in gold, don’t take advice from clowns who are trying to convince you to buy it.


Places to retire abroad

This video covers 5 options for Americans who want to retire abroad, focusing on Costa Rica, Italy, Spain, France and Ireland.


Buy? Hold? Sell? What’s the Answer?

The economic recession and resulting volatile stock market has almost become cliché. Advertisers overuse the situation and analysts overthink the problems until we almost stop listening – but still, we want answers. Being able to discern between the nonsense and the facts is an ability that can be quite beneficial. It’s necessary to understand the ways that a shaky economic system can affect your investments and the actions you can do to counteract the effects. What can we do to protect our financial security and future in a market such as this?

Don’t Panic

People who lose huge sums of money in a volatile market are the ones who sell as soon as stock prices start to fall. This is the exact opposite of everything we know to do, yet we still see it time and again. Yes, it’s scary when the stocks you bought at $52 per share suddenly plummet to under $20, but most of the time these stocks rebound eventually. Instead of dialing your stock broker and issuing the order to retreat, hold on to your stocks. Better yet, buy more. It’s easy to say and hard to do, but the wisest advice when it comes to investing is buy low and sell high. If you think about it, it’s the only way to actually make money in the stock market at all.

Think Long Term

Too many investors look at gains monthly or yearly. The real value of our investments isn’t short-term; it’s the value they accumulate over decades of solid investing. We know the concept of diversifying investments, but we don’t recognize the importance of diversifying our investment plans. Invest some money for short return, say five years from now. Make other investments for a return in 10 years, 15 years and 20 years. This strategy hedges investments in the same way as diversifying our portfolios with a mix of high risk and low risk stocks.

Turn Off the News

Up, down, up, down…. we know how it goes. Once you’ve made sound investment decisions, ignore the buzz of the day and concentrate on the future of your investments. Historically, the market sees solid gains after a recession subsides. Even this world leading financial adviser Kenneth Fisher can’t say exactly when things will level out, but almost all economists believe the market will eventually recover. Instead of fretting over market swings due to daily news events and political situations, keep your eye on the end goal.

Is it easy to turn a blind eye when it seems like the global marketplace is in turmoil? No, it isn’t. But investors who keep their cool and continue to make sound investments not only see returns financially in the long run – their investments are helping drive the market forward into a better, more sound future for us all.


The Average Life Expectancy of Fiat Currency

Gold was the original basis for currencies around the world but as the years passed, many countries shyed away from this system in favor of a more stable base for their money. In 1971, the U.S. Dollar was officially no longer based upon the price of gold, instead basing itself purely on market value. This form of money is known as fiat currency and countries around the world have adopted this system. [1, 5]

Fiat Currencies Today

The Canadian dollar, along with the U.S. dollar, the Euro, the British pound, the Australian dollar, and the Japanese Yen, account for over 80% of currencies on the exchange today. [1] On average, fiat currency is expected to live for 27 years, though the money with the shortest life span only managed to survive for a month. [2]

The longest living currency, however, the British Pound Sterling, has managed to stay alive for the past 318 years. Since its inception, the Pound was originally valued purely off of the price of 12 ounces of silver. Today it is 0.5% of its original value, meaning that over the course of its lifetime, it has lost 99.5% of its worth. [2]

In a study of 775 currencies by DollarDaze, 77% of those currencies had failed. In fact, 95 currencies were destroyed as a result of World War II alone. In July of 2008, 71.7 billion dollars of U.S. currency was held as banknotes, though by December of that same year, it had soared to 782.3 billion. The sheer value of banknotes represented 47% of the total U.S. monetary base. [4]

How Do Currencies Lose Value?

Many factors influence the devaluation of a currency, though inflation plays a major role. The countries with lower inflation rates that have currencies with more buying power, are Germany, Japan, Switzerland, and Canada. Central banks also have a great deal of control over the value of a currency by way of interest rates. [3]

By raising the interest rate of a central bank, foreign currency traders are enticed to invest their money, ultimately raising the foreign exchange rate of that specific monetary system. A country’s trade debt will also drag down its currency value if the amount it spends on trading is greater than the money it earns. A system, called the terms of trade, compares the import price to the export price of various goods, either devaluing or improving upon the fiat currency. [3]

Public debt is similarly unattractive to foreign investors and it could scare away those who fear that a country may default on its deficits. Some companies gauge the value of a currency and give it a value, referred to as a country’s debt rating, which may ultimately determine a monetary system’s value. [3]

There are currently only 176 of the aforementioned 775 currencies alive today. [4] The most recent currency death occurred in Zimbabwe when its monetary system fell victim to hyperinflation. At the time of its death in 2009,100-trillion Zimbabwe Dollars was equal to only $1 U.S. Dollar. Now a collector’s item, the 100-trillion-dollar bank note that was printed for a brief time by the Zimbabwean government can be purchased for around $5.


Many economists say that what happened in Zimbabwe stands as a reminder of what hyperinflation can do to a country under the right circumstances. A number of currencies today have outlived the 27 year time span, though many have failed along the way. Perhaps countries can gain from seeing other currencies collapse and correct their flaws. [3]

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Bad investments plague many athletes

Philadelphia Phillies Roy Halladay pitches against the Washington Natinoals during the first inning at Nationals Park in Washington on August 21, 2011. UPI/Kevin Dietsch

We’ve been hearing these stories for years. Professional athletes make millions of dollars, and then they end up broke and/or bankrupt. These are cautionary tales even for the average investor.

Here’s an interesting article that details bad investments by athletes. One of the recurring themes involves investing in businesses. Investing in the business of another person is usually not the way to invest your money. Many businesses fail, and if that happens you lose all of your investment.

Also, if you’ve made a lot of money, you should be more interested in preserving what you’ve earned. Don’t get greedy on risky get rich ideas – you’re already rich!

Few people think about what they can lose when they make these kinds of investments. Read the article and you’ll get an idea of what types of investments you should avoid.