As the world economy struggles with the ongoing economic crisis, analysts talk about changing stock market investments and debt management? Applying hard lessons and watching world trends could be the best investments for your future. But with the volatility of the stock markets and growing concerns about hyperinflation or deflation, just want are the best investments?
I’m not a financial genius nor am I an investment analyst, but after reading a lot of articles about the global economy and proper investing, I’ve learned a little about fiat currency and the gold standard. As international economies slowly recover from the recent financial upheavals, it appears some financial analysts are looking at precious metals and a return to the gold standard as smart investing. The reason — money in the form of gold, silver and precious metals can be used internationally to make purchases if paper money fails. Paper money, also called fiat currency, is only as good as the faith people put into it and its relative scarcity, according to an article at Knaves.com. How you choose to manage your money could be the difference between having buying power in the future or struggling to pay fluctuating day-to-day prices.
What is Fiat Currency
Fiat currencies are another name for national currencies, according to Wikipedia, which include the U.S. dollar, the Euro, the Japanese Yen, Swiss Mark, German Mark, and the Pound Sterling. They are held in high quantities and used by governments for international trades on the global market for products and commodities like oil and gold. However, in 1971 the U.S. dollar moved from being backed by the gold standard and became a fiat currency backed by the government; other countries followed. Now, since the global economic crisis, questions arise whether the world will return to the gold standard or continue operating with fiat currencies. In response to this question, certain countries are educating their citizens in better debt and money management to ensure they are prepared for the future.
Are you Investment Savvy?
Becoming more familiar with stock market trends and money management means being prepared; the younger generation has become more investment savvy and many have learned how to play the stock markets to make and save money. Because of the economic crisis, many believe the return to the gold standard is coming, so they are buying gold and precious metal stocks, equities, or slowly building gold bullion reserves. Should fiat currencies fail, they will still have buying power by the strength and price of their hard money, i.e. gold bullion, silver coins, etc.
International investors can refer to the Kitco.com web page to view the daily international prices of gold, silver, palladium, platinum and rhodium. Resources like The Gold Report, The Energy Report or The Critical Metals Report provide insight on international mining, drilling, investment strategies and expert insight into where and how to invest in international markets. Information from varied resources state that sound investments take patience to payoff, but when done well could give the investor a 50% or more return in profits. Selling too soon could mean a huge loss.
What’s the Best Investment?
From all the information available on the Internet, investment experts suggest people use caution and be frugal in 2011. History shows various trends and while precious metals and oil are explored, discovered, and drilled, supply and demand play a huge role in determining prices, investment opportunities and affect the international stock markets and world economy. For those who can afford to invest, invest wisely after studying the markets. For those that can’t, don’t panic–instead, focus on getting and staying out of debt. Learn to live within your means. And don’t be frivolous by returning to bad habits that perhaps created financial crises in the first place.
Many see the global business and investment communities slowly recovering and positively moving forward. Others speak of impending gloom, hyperinflation and more economic woes. For the average citizen in any international community, the wise choice is be cautious. As the world changes through social media and social networking, the Internet has opened the world to international communication by a click of the mouse. Using this technology to educate yourself on international trade, prudent investing, and financial economics, you can take charge of your own finances. Becoming your own debt manager not only empowers you, but can be the lifeblood that may save you from future economic calamity.