How to Profit During the Next Recession
All paper money eventually
returns to its intrinsic value – zero.
Wealthy people buy assets, poor people acquire liabilities.
Assets ensure the money you have accumulated and the time you have spent doing it do not go to waste.
Liabilities , on the other hand, keep you working robbing you of valuable time, freedom, and money.
Wealth Preservation Assets
The four main wealth preservation asset categories are land, real estate, physical gold, rare collectibles and art. As you may have noticed, all of the categories include tangible items.
Gold, land, real estate and rare art protect your wealth against fiat inflation and economic upheavals.
Despite we have been led to believe that cryptocurrency is a great store of value, none of the wealth preservation assets wealthy people use to store their wealth does not include cryptocurrency (nor other intangible items such as fiat based financial products – stocks, bonds, annuities so forth).
Dematerialization of Wealth: If You Can’t Hold It, You Don’t Own It
Cryptocurrencies have seduced the middle class with the privacy, security, and convenience proposition.
You hear that we will not need banks in the near future because of the promises blockchain technology brings us. But is it a fact?
Let us examine the origins of distributed ledger technology and smart contracts.
The 1996 white paper outsourced to MIT by the National Security Agency, outlining distributed ledger technology and peer-to-peer secure digital cash transfer, precedes Satoshi Nakamoto’s white paper on Bitcoin.
The language and the scope of How to make a mint: The Cryptography of Anonymous Electronic Cash are very similar in nature to Satoshi’s Bitcoin: A Peer-to-Peer Electronic Cash System. Thus, the creator of Bitcoin may not be so anonymous.
Furthermore, the main developer of Bitcoin and Bitcoin Cash, Blockstream, is controlled and sponsored by the Bilderberg Group, represented by the financial elite, in other words, central banks. Freedom-promising Bitcoin is not decentralized after all.
The good news, cryptocurrency, as a speculative asset, is here to stay, however, we want know in what capacity.
The bad news, for the wealthy few, crypto is a means of unlimited financial control, not a store of value, and a wealth de-materialization tool for those who want to store their wealth on a blockchain. If you cannot hold it, you do not own it.
So How Do We Protect Wealth?
We protect wealth by owning tangible assets: real estate, collectible gold and rare art.
All of them are detached from paper fiat contracts and yield wealth protection from economic downturns by preserving purchasing power.
Notice, none of the above asset groups contains fiat based financial assets such as stocks, bonds, and cryptocurrency.
Cryptocurrency represents a type of a technological stock. It has been speculated that it might protect during the dollar collapse but does not have evidence.
As we discussed earlier, it is controlled by central banks.
Cryptocurrency and blockchain assets only provide positive cash flow during the gold rush, when positive market sentiment occurs.
Crypto has not proven to store value the way gold does; the nominal confusion that cryptocurrency is a gold equivalent store of value comes from the Bitcoin and Ethereum price relationship to fiat currency.
Bitcoin does not go up in price, but the fiat loses its value with time by design.
Physical Gold & Precious Metals
Physical Silver and Gold
There are two types of gold that protect your purchasing power differently: bullion gold (or IRA eligible) and collectible gold (rare coins minted before 1933).
Both, bullion gold and rare collectible gold provide wealth protection during an economic reset by preserving your purchasing power unless it becomes legal to confiscate gold.
Historically collectible gold is exempt from confiscation. Roosevelt’s 1933’s Executive Order 6102 stipulated that bullion gold was to be confiscated under penalty but collectible gold was excluded from regulation.
It was legal to own collectible gold. That is why the top 1% buys rare collectible gold coins and collectible gold objects.
Real Estate & Land
Real estate not only preserves wealth but also provides steady cash flow by granting others the right to use it through renting and leasing.
Real estate and land are two tangible wealth preservation assets that also lead to financial independence through positive cash flow.
Unlike real estate and land, gold, silver, and small collectible art objects give portable protection against financial and economic turmoil.
You can literally pick them up and easily move and still maintain a comfortable lifestyle in a new place.
Gold, precious metals and collectibles handsomely protect your purchasing power.
Furthermore, wealthy use gold and collectibles as a crisis investment strategy when many assets such as land and real estate go on sale because fiat currency devalues and becomes worthless.
Such assets get transferred from the hands of those who did not have tangible wealth preservation assets into the hands who did.
That is how wealthy people become wealthier regardless of economic upheaval.
Until next time.