Inflation and gold... Part I

The problem in Europe, the U.S. and Latin America, is that the value of money on their economies is imaginary.

Imaginary because paper money showing $ 100 is not worth that. We "imagine" or assume by convention that has that value.
Some may say that paper money is backed by gold reserves of that country. Wrong. These gold reserves are used to tell the creditor country that the country has how to face their debts if any eventuality shows up, but you can't assume that each bill that you have in your wallet is supported by a piece of gold of that reserve.
How does this impact on inflation and the current economic crisis?
We will continue discussing this topic in the next article. You'll find it very useful for your economy.
Marco Picon
Author of "Cash for Gold!"

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