Date: November 30, 2012
By Richard Duncan, Best Selling Author and Economic Specialist
To fully understand why the global economy is the way it is today, we need to go back to when it all started unraveling. Only by understanding the past can we shift our focus to what we can do in the future to save ourselves.
There used to be a legal requirement for all US currency in circulation to be backed by gold. That means the US had to hold a certain amount of gold for every dollar it printed. This changed in 1968. The decision was made to move the US Dollar off the gold standard, and in doing so, the US Federal Reserve was able to print currency without any constraints.
That caused the US currency supply to explode. Since all the world’s currencies used the US Dollar as it’s reserve currency, the world’s currency supply exploded as well.
That was just the beginning of the story. What happened next simply dug the hole deeper. Banks used to have a limitation on the amount of credit they could create based on how much currency they had on the books. This was to ensure banks had enough reserves to repay their customers when they wanted to take their money out. Over the years, the amount banks needed to hold in reserve kept dropping and by 2007, this limitation had all been removed.
The long story short, banks could create as much credit as they could out of thin air and so could central government banks. Having all this credit floating around with nothing to back it up has all but buried us in debt and created this huge global crisis we find ourselves in today.
Of course, there’s a lot of other contributing factors in play that has brought our economy to the brink of collapse.
Knowing this, we need to prepare ourselves for the inevitable collapse of this credit bubble we’re all in. Do you know what to do in the very real threat of the crash of the banking sector? How do you protect yourself if this is going to have worldwide impact? How can your business survive and succeed in this climate? How can you secure your financial future?
Learn and find out how you can overcome all these challenges and more at the Wealth Summit which is happening on the 7th-9th December 2012. For more information, kindly visit www.wealth-summit.com.