9 Reasons Why Gold Will Soon Replace Treasuries As The Ultimate Store-Of-Value Asset

In the age of fiat currency, the distinct concepts of saving and investing have become conflated and confused.

Saving is producing more than you consume and then setting it the difference aside. Investing is allocating capital to a productive business to create more wealth. Investing has more risk — and potential reward — than saving.

Today, however, what most people think of as saving is actually investing. That’s because most people take the excess of their production over consumption and put it into the stock or bond market.

Most people understand that it’s not optimal to simply hold fiat currency, which the central banks continuously debase. So they put their money into other assets, primarily bonds and stocks.

In other words, fiat currency and inflation have ruined saving for most people. It has forced them further down the risk curve into stocks, bonds, and other investments in a struggle to maintain their purchasing power.

However, there is no guarantee those investments will even keep up with inflation. But suppose they do. They will then be subject to a capital gains tax, even if it’s only a nominal gain, not a real one.

That means savers face the daunting task of not only keeping up with inflation but also outpacing the capital gains tax on the nominal gain just to maintain their purchasing power. This reeks of a central banking ponzi scheme that will only benefit central planners in government, and central bankers, long term.

Before the era of easy-to-produce fiat currency, people could simply save in money, which was either gold or a derivation of it. There was no need for a dentist, construction worker, or taxi driver also to become a hedge fund manager to try to keep their head above water.