Fiat Money is not as Stable as you think
Fiat money is the standard medium of exchange today. If you look at any person’s wallet anywhere in the world, you’ll find some sort of paper money ranging from dollars to pounds to euros among other currencies. It’s a system recognized by the global market and people have faith in it. However, fiat money is not as stable as you think.
Fiat Money at a Glance
Fiat money is any currency that a government has declared to be legal tender. It was first used in China around 1000 A.D. and has been adopted by many countries since then.
It is used not only as a means for purchasing goods but also as a medium of debt repayment. However, it has no intrinsic value and is therefore not backed by a physical commodity. Its value is not derived from the material it is made from but rather on the relationship between supply and demand.
Paper money such as dollars, euros, pounds, and the like only have value because the government maintains that value. However, its value fluctuates along with the economic conditions of the country that backs it.
The Danger of Fiat Money
The problem with fiat money is that while it is generally seen as more stable than commodity-backed currencies, it can collapse under the wrong circumstances. Since fiat money is used all over the world, there is a huge supply of paper money which causes hyperinflation. The deterioration of economies can lead to the devaluation of fiat currencies which will then result in people’s losing faith in it.
This has happened multiple times with the most recent occurring in Venezuela in 2017. The government’s economic policies have pushed the bolivar into a downward spiral and prices skyrocketed. At the height of the turmoil, the Bolivar lost 96 percent of its value.
Gold as a Hedge Against the Danger of Fiat Money
Gold has been around for centuries and it has been used not only for jewellery and decoration but also for as a commodity-back currency It has been used as a medium of exchange in many cultures and it continues to be a store of wealth to this day.
Unlike fiat currencies, gold, and other precious metals will always have value. While its prices can fluctuate depending on the value of fiat currency, it cannot be devalued at the whim of any government. It is a genuine commodity with a real value that even in the midst of inflation and economic chaos, it retains its capacity to store value and wealth. Therefore, if you want to protect your wealth from fiat currency collapse then you must invest in gold since fiat money isn’t as stable as you think.
If you’re in Australia and have decided to invest in gold, then the next step for you is to find a safe place to store it. However, home safes can cause safety problems for you and your family and while banks offer safe locker solutions, they aren’t always ideal.
To truly protect your wealth, you need a partner that can provide private vault offerings that are safe and secure. This is where Private Vaults Australia (PVA) comes in.
Our safe deposit boxes and storage solutions are kept secure with state-of-the-art security systems. Access is granted only to the renter of the safe deposit boxes via three layers of security: electronic (smartphone app), biometric (wrist vein reader) and physical (your key). PVA does not keep a copy of your key so you can be sure that only you can get the contents of your safestore.
2 Months Free, No long term commitment necessary.* Limited spots available.