The Fall of the Middle-Class. You CAN Get Out of the Way.

In my last article I presented the image of the middle-class balanced on top of a fence, with the poor on one side and the rich on the other, and I wrote of what’s most likely to happen when the currencies of the world collapse.

As the middle-class looses the fuel that runs their debt-driven lives, they will topple from the fence and end up with the poor.

This is not only bad for the middle-class, who aren’t used in the least to BEING poor, but it will put an extreme burden on the infrastructure that society has in place for providing for the poor.

Imagine, overnight, the ranks of the poor swelling two, three, 10, perhaps 100 fold or more! How would government and charitable organizations deal with it?

Fortunately, I believe that there’s a way for middle-class people like you and I to lessen the impact of the coming collapse for not only ourselves, but for those who are already poor.

In fact, if you ARE on the poor side of the fence already, I believe that YOU TOO can take steps to BETTER your condition as the world moves through and beyond the coming currency crisis.

How A Huge Collapse Can Mean A Great Gain

The adage, “Wealth is never destroyed, it simply changes hands”, is similar to the commonly understood law of energy conservation, which states that energy is never lost, it simply changes form.

When you boil a pot of water, the electricity in your household wiring heats the element on your stove. Some of the energy escapes as dissipated heat, and some causes the water to boil. The boiling water releases steam, which is simply another transfer of energy.

The total energy input is always equal to the sum of the energy output, in whatever form it takes.

The same is true of financial systems.

Wealth is never destroyed, it simply changes hands.

The middle-class will see their “wealth”, which is held in the form of currencies, stocks and bonds based on currencies, and debt evaporating all around them when the currency collapse comes, but, that wealth will not really disappear. It will simply move into someone else’s hands.

To understand how this is possible, let’s take a look at how a “rich” person differs from a middle-class person. Contrary to what you believe, it’s got nothing to do with how much “money” a person has.

To most people, the rich are viewed as having “tons” of money, but what’s not apparent is that the rich SELDOM hold more than a “working” amount of their wealth in currencies of any kind! Instead, the vast majority of their wealth is in the form of tangible assets that produce cash flow, and which will NOT deflate as the value of the world’s currencies begin to spiral downward. In fact, these assets will INCREASE in value, when compared to the dollar (for example).

Imagine for a moment that you own one million US dollars worth of gold. I use gold as an example because it has its own, intrinsic value.  As of the writing of this article, $1,000,000 US will buy you about 724 ounces.

Now, imagine if the dollar was to collapse and loose it’s worth by, let’s say, a factor of 10. In other words, the dollar is now worth 1/10th of what it was.

As an investor in gold, you had 724 ounces before the dollar collapsed and you still have 724 ounces afterwards.  There has been no more gold produced, nor has any been destroyed (to any significant degree either way) so your gold maintains it’s intrinsic value.

To look at it another way, your gold is now worth 10 times more in terms of dollars than it was before the collapse. You now have ten million dollars worth of gold in your safe.

Gold is just one of the instruments that will maintain it’s intrinsic value. Silver is another, as are platinum, palladium and other precious metals. Businesses can retain their values as can real estate holdings, provided that they’re structured properly.

In general, the rich, because they’ve learned HOW to acquire tangible assets, are relatively immune to monetary collapse and, in fact, are in a position to BENEFIT from that collapse, where as the middle-class will be in a position of loss.

The wealth transfer will go FROM the middle-class TO the rich.

The old saying, “The rich get richer and the poor get poorer”,  isn’t quite accurate. The rich get richer, yes, but it’s at the expense of the middle-class, not the poor.

Let’s say, as a middle-class person, that you have a mortgage of $200,000 when the currency collapse comes. Prices skyrocket and you can’t afford to pay your mortgage, so the bank takes your home.

Now, the bank isn’t in the home selling business, they’re in the banking business, so they’re going to want to get rid of your home as soon as possible so that they can convert it back into money, which is a bank’s useable asset.

Let’s say your home was worth $700,000 before the collapse.  If the dollar declined by 10 times then your home is now worth $70,000, and the bank has to live with that fact as it tries to sell (they won’t be able to sell the home for more than what the market will bear).

Now, what if we assume that you weren’t the only one in this situation and the bank now has not just your home, but 50 homes like this to get rid of. Now they’re really motivated to get rid of them so they’ll try to sell them off at a discounted rate of, say, 75 cents on the dollar. So, your $700,000 home now worth $70,000 due to the dollar’s collapse, get’s discounted even further to only $52,500.

How the “Rich” Take Advantage of Monetary Collapse

Now, take on the role of the rich person, with the 1o MILLION dollars worth of gold (up from one million before the collapse) in your safe.

You go to the bank and say, “Mr. (or Mrs.) Banker, you’ve got 50 homes here valued at roughly $52,000 each. I’d like to offer you 40,000 each for them and take them all off your hands right now!”

The banker will be thrilled to be able to get rid of all the homes, even at the FURTHER discounted price, because that gets the bank out of the housing business and back into the banking business in one, fell swoop.

They accept your offer and you walk away with the title to 50, $700,000 homes for 2 million dollars or, 1/5th of the gold that you own.

Now, what do you do with those homes?

You could go back to the people that lost them, the middle-class families that were hit so hard, and offer to sell them back to them. You, in effect, become their new banker. You put people back into their homes, for a price that they can afford, and which makes you a profit to boot.

Or, you hold onto them and sell them later as housing prices recover.

Or, you turn them all into rental properties and, in addition to owning the properties, you now have a monthly positive cashflow.

As a rich person, who had tangible assets before the crash, you have TREMENDOUS purchasing power after the crash, with which you can INCREASE your assets.

But What If I’m Not Rich?

Even if you aren’t rich, you can still get in a position to be effected less by the coming money crash and to even benefit from it.

By working now to acquire tangible assets, while they’re still relatively affordable, you can come out in better shape once the currency crisis hits with it’s full force.

Now, I’m not a financial advisor and don’t claim to have a crystal ball, so I’m not advising you to do anything. All I can tell you is what MY plan is based on my belief that world currencies WILL come crashing down in as little as 6 months time.

The best time frames I have been able to discover put the time of the crash at anywhere from 6 months to five years, and I’m truly hoping that it’ll be later than sooner, but, as I’ve said before, hope for the best and plan for the worst.

As of this writing, gold is valued at $1,392.90 US per ounce.  Silver is at $26.37 US an ounce. In my current situation, my best option is in purchasing gold and silver, because they are still relatively affordable (silver, especially).

My research is telling me that gold and silver have an EXCELLENT possibility of increasing in value VERY substantially as the currency crisis takes hold.

Some are saying that gold will easily hit $5,000 US per ounce. I have seen credible arguments for it going 10 times higher than that.

Silver is even more affordable and historically maintains a very close price relationship with gold. So, if gold rises, so does silver and the relative gains are comparable.

You may be in a different financial position, so you’re going to have to make a decision as to what YOUR best option is.

Over all, my goal is to ensure that I have acquired the maximum amount of tangible assets BEFORE the drastic decline takes place, which will then put me in a position to BENEFIT once it does.

The trick, of course, is to know WHEN your assets should be converted from one form to another.

Gold and silver, if not put to use, are really just a bunch of shiny metals.  Nice to look at, but they don’t really do anything for you.

However, if your gold or silver serves to PRESERVE or INCREASE your wealth through the currency crisis, and is then put to work to acquire more REVENUE GENERATING assets after the fact, then they are truly valuable.

Right now I believe our best course of action is in PRESERVATION of wealth through the acquisition of gold and silver but, like I said before, that’s my opinion.

You need to decide for yourself.