The Death of Cash – Shield Your Savings and Profit Today
The evidence is in… and cash is out. It’s going the way of the dodo.
Today, the death of cash is taking a slow but forceful path. And you must follow its footsteps or fall behind.
It’s crucial that you pay attention to the death of cash. Money is, like it or not, the cornerstone of your life. Without it, how would you secure food and shelter?
If you follow the steps I outline below, not only will you be able to protect yourself… but you can actually profit from the death of cash.
First, let’s look at the changes underway.
Your Dollars Today
The majority of payments today are already digital. Few physical dollars actually exchange hands. Roughly 1.45 trillion physical dollars are in circulation. This might seem large, but looks can be deceiving…
The official M2 money supply is $12.7 trillion. (M2 is an economic measure that includes cash, savings accounts, checking accounts and positions in money market funds.) And that doesn’t factor in all the digital money.
Fractional reserve banking and other financial tricks balloon the amount of dollars needed to sustain our system. Many estimates put the derivatives market at a value of more than $1.2 quadrillion.
That’s over $1,000 trillion… or $1,000,000 billion!
So, the number of dollars in circulation is astronomically small in comparison. There simply isn’t even enough physical cash to cover savings, checking and money market accounts.
Governments Push the Death of Cash
As we’ve seen, banks panic when waves of folks start demanding their physical dollars.
Banks hold only a small fraction of actual cash on hand. The U.S. reserve ratio requirement is set at 10%. So for every $100 you deposit, the bank needs to hold only $10.
If too many savers start asking for their dollars, banks can’t physically repay them. Word spreads and even more folks try to take their money out…
This is called a bank run.
The banks can’t keep their promise to pay back your money when you need it. Faith is lost. Panic ensues.
In the early 1930s, huge U.S. bank runs formed. The entire U.S. economy was in chaos. And many families lost their life savings. So the government stepped in. To prevent new bank runs, the government crafted a few tools.
One tool was deposit insurance.
The FDIC, which was created in 1933, ensures up to $250,000 of your savings in banks today. The government will now repay you dollar for dollar if a bank goes belly-up. This promise deters savers from running to stressed banks. If they fail, the quasi-government FDIC has got your back.
The problem is… that’s just a promise on a broken promise.
Physical dollars used to be backed by gold, as part of the Bretton Woods system. The government used to promise you a set amount of gold for each dollar. But that ended in 1971. The fiat U.S. dollars are now worth only the cotton they were printed on – or what someone is willing to accept for them.
The money system is built on trust. It always has been. And as the system grows, the government stretches that trust. Governments are now phasing out physical dollars completely.
Here are just a few recent examples:
- The U.S. government stopped issuing the $500 bill in 1969. Next up is the $100 bill.
- You can’t withdraw more than $10,000 from your bank without inviting intrusive questions.
- Italy and France banned cash transactions greater than 1,000 euros.
- Spain outlawed cash transactions over 2,500 euros.
- Russia is proposing a ban on cash transactions over 300,000 rubles.
At the moment, cash is still king… but it’s losing its strength every day. Governments and technologies chip away at it.
The death of cash is inevitable. You must adapt.
Shield Your Savings and Profit From the Death of Cash
It’s wise not to trust the government’s funny money. But what can you do?
Hiding dollars under your mattress is pointless. Soon, businesses won’t be able to accept them. You could get a little in collector’s value in a few decades… but likely not what they’re worth today.
And if you don’t want your life savings in digital currencies (an asset class that still has a lot of kinks to work out), where can you turn?
The best way to protect yourself is with a properly allocated mix of physical assets and equities. Here are three strong options to shield yourself – and even profit – from the death of cash.
- Buy gold and silver. For thousands of years, these shiny metals have held their value. And you can trade them anywhere in the world. They aren’t built on trust like today’s dollars. A government doesn’t need to promise they have value.
In 1964, the U.S. stopped minting silver coins. At that time, a quarter would buy roughly a gallon of gas. Today, if you melted an old silver quarter, the silver content would still buy roughly a gallon of gas.
Gold and silver have proven themselves as lasting physical currencies. They’ve stood the test of time.An easy way to gain exposure to them is through exchange-traded funds, which issue shares that represent a set amount of the metal in question. Two widely used funds are SPDR Gold Shares (NYSE: GLD) and iShares Silver Trust (NYSE: SLV).
- Buy real estate. Unlike gold and silver, land doesn’t just hold value. If managed properly, its worth can increase. Farmland and rental properties can keep a steady stream of value flowing to the owners. You can also buy land overseas to limit government control.
And if you’re wary of dealing with the taxes and time it takes to manage a property, there are other hands-off alternatives.
Real estate investment trusts, which own multiple properties and trade on the stock market, let small investors own land. One well-diversified holding is the Vanguard REIT Index (Nasdaq: VGSIX).
- Buy stocks. This is a great alternative to holding cash. Stocks give you partial ownership of a business with just a few clicks.
Simply buy great stocks with solid fundamentals and growth potential. And in many cases, you’ll even collect a dividend along the way. You can find many great stock recommendations – for free – by browsing Investment U.
Precious metals, real estate and stocks are great alternatives to holding cash. We argue they’re a superior option to “holding” digital money. (Even more so because these assets aren’t as susceptible to online theft.)
The economy is changing and dollars are dwindling. You need to prepare for the death of cash today.
P.S. I don’t make these comments lightly. What’s happening in our economy is truly historic. Yale economist Robert Shiller says this revolution “may be as profound as that wrought by our ancient ancestors’ invention of coins.” The death of cash is just part of a $662 trillion event that will have a profound impact on anyone who reads this. If you’re concerned about the preservation and growth of your wealth, I urge you to watch this eye-opening video.