Dollars vs. Bitcoin vs. Gold vs. Food
By Lee Bellinger
- New currency alternatives to the Obama Dollar are proliferating on a global level.
- Imagine a totally tax-free 5%+ annual return on something you need to buy anyway.
The current mega-trendy rise of the Internet pseudo-currency “Bitcoin” is an interesting symptom of that worry. Bitcoin was founded with a fixed maximum number of units that can never be “mined.” You may buy Bitcoins for your online “wallet” and then use them to make online purchases. Bitcoin transactions are intended to function outside the direct control of government.
I will get to that shortly, and I’ll also explain what I believe is happening with a more time-tested store of value, precious metals.
An Escape Hatch from the
Government’s Money Debasement Scam
Long-term financial planning through conventional means is all but impossible these days.
As legendary investor Warren Buffett has acknowledged, it is completely appropriate that we should all “fear paper money.” Not that long ago, you could drive a new car off the sales lot for under $5,000. Now you can easily pay $40,000 for the same privilege. A house used to cost under $25,000, and you could get a year’s supply of groceries for under $1,500.
This steady, ongoing trend of diminishing buying power has been going on for decades despite official government statistics underreporting the extent of cumulative inflation.
It is no small wonder that so many people feel anxiety about the future potential decline of their buying power. Especially once they are out of the workforce for good. This story can help you, I promise. It doesn’t matter if you have a cracked nest egg or are pretty well off.
You Don’t Have to “Feel Poorer”
Beating this rigged system is based on simplicity itself.
A surprisingly high number of Americans are legally and quietly exploiting a major loophole in preserving their purchasing power from the government’s money debasement scam.
You may be required to denominate your wealth in dollars for tax purposes. However, you are NOT required to hold your assets in dollar form. This is a huge loophole that could change your life big-time.
Let’s talk about evading the traps that are being set for you first.
As your savings’ purchasing power slowly sinks, a very common response is to “stretch” the retirement dollars you know you can count on, which is a fine response so far as it goes. Most people can do a lot more to maximize the efficiency of their purchasing power. But by itself that is probably not enough.
What you need and deserve is to learn how to make non-taxable gains on things you routinely buy and use and will continue to do so for so long as you live. This escape hatch turns sneaky government policies designed to steal your spending power in the dead of night into your secret weapon instead.
Today’s dollar debasement is done so skillfully and so gradually, that most people don’t notice the declining purchasing power of their dollar-denominated life savings until it is far too late to do anything about it. The unaware are being drained of purchasing power on all sides, and it is important and crucial to understand how this works.
Invest in What You Are Already Buying
Unfortunately, scrimping and economizing your existing resources may be necessary now, but is not a sufficient long-term response. The governmentdirected decline in your retirement dollars’ purchasing power is too great a risk to ignore, especially if you plan to live for many more years to come. Plus, there is a better way that actually works, no matter what your financial situation is, because it involves using dollars you are already spending.
Many people respond to weaker purchasing power by chasing for bigger and bigger returns on their investment dollars. All too often I hear horror stories of people trying to improve their nest egg at later stages of their life – investing heavily on great sounding opportunities that are far too risky for them.
You Can Escape from This Universal Trap
There is a slick new industry out there that specializes in promising “market-beating” returns. “Sure fire” trading systems and “get rich” guides may be highly marketable, but they are all part of a larger sucker’s bet.
Adding to people’s anxiety and helping to fuel the Bitcoin craze are all the trading games that are being played with the precious metals markets. I still like and buy precious metals despite all the weakness caused by institutional short sellers on the futures markets and cash outflows from ETFs over the past year (resulting in forced liquidations of the metals). I agree with the school of thought that there are strong indications that selling exhaustion may be at hand.
My point is that recent volatility in the precious metals markets have given rise to other potential stores of value, as we have seen with the Bitcoin mania. Since 2013, the price of a Bitcoin skyrocketed from a low of $17 to a high of over $1,200 to $253 where it is now. Nobody knows what their true value – if any – actually is.
Bitcoin is a form of Internet fiat currency. Many libertarians love the idea of using Bitcoins as money, because there is a limited supply. Those with a statist point of view who are hostile to hard money (gold and silver) also like Bitcoins because this form of exchange cannot be hidden or hoarded like cash or gold can.
Uncle Sam Is Watching the Bitcoin Phenomenon
In recent Senate hearings focused on the popular Bitcoins, it became clear that Uncle Sam is watching this new form of pseudo-currency very carefully, but is not entirely sure what to do about it. At least not yet.
Getting a Bitcoin wallet is just a matter of buying the units as you would any other good or service, but there is no privacy in choosing Bitcoin specifically. Records of all Bitcoin transactions are stored on a public blockchain, making anonymity tenuous at best.
The purchasing power of Bitcoins gyrate wildly due to speculative buying, which has made it a fascination to those who feel compelled to gamble to make more gains before retirement.
Food May Not Be Money, but It Can Help Protect You from Inflation
I do want to suggest an alternative store of value that is simple, basic, and overlooked. Please keep an open mind because this suggestion may surprise you.
Okay, it’s pretty straightforward, we all will have to buy food for as long as we live. And lots of it.
What’s less obvious is that there are startling nontaxable financial gains you can make when investing in your deep pantry, filled with very long lasting, delicious comfort food. You eventually eat it, so buying non-perishable foodstuffs in bulk instead of more expensive groceries is totally zero risk. And your “returns” (in the form of cost savings ahead of rising prices) are completely tax-free.
Turn Your Pantry into a Tax-Free Profit Center
Buying low and selling high is basic, and every shopper knows deep down that food costs about 3-5% more each year, with some foods rising at a much faster rate. Numerous groups that watch this issue concur. Smaller and smaller portions of calories coupled with a steadily higher percentage of “packaging” is an across-theboard trend in all supermarkets.
From cupcakes to peanut butter, the portions are all smaller for the same price. The old 5 pound bag of sugar is now 4 pounds. Mayonnaise jars have fallen to 30 ounces from 34 ounces. The 13.5 ounce can of corn was 16 ounces before. What is now 14 ounces of pre-packed sausage was once 16 ounces. Food retailers across the board are steadily increasing the amount of packaging vs. actual calories.
I know many food supply industry insiders and they agree — food inflation is real, even if it does go unreported by the financial media. Government statistics don’t even pretend to measure this trend. Food prices are volatile and under pressure from many sources, including decades of government-directed squandering of cheap water supplies and the overuse of chemicals, not to mention the general drop in the nutritional value of mass produced foods.
So, let’s talk about the economics of dried beans, which can be stored for 7 years and still taste great. In year one you gain, say 3%. By year 7, taking into account the magic of compound interest you gain 23%. If your dried milk lasts 20 years, it will yield a 16% tax-free gain within 5 years, a 34% gain in 10, and a whopping 80% jump in your value in 20.
Basic wheat lasts 25 years, a 109% gain! Popular rolled oats last 25 years as well!
Dried rice lasts 25 years at least. It will still taste great after a stunning 109% increase in value! If food inflation goes higher — and there are good reasons to think it will — your gains will be even better. A 5% inflation rate means you’d be earning 199% over 25 years… on things you would have to buy anyway.
A 5%+ Gain on Your Money –
For Something You Have to Buy Anyway
This is where you can come out way ahead. If you take the care to buy long lasting, high quality food at a lower price and eat it when it costs more, you have made a significant non-taxable gain!
Most investors would kill for a 5% or better annual tax-free return on their investment! The trick of course is to buy great quality, long lasting food that you can eat later.
Harnessing food inflation to your financial advantage is a winning strategy to repair or strengthen your personal buying power. Since the government lies about food inflation, you can make real-world financial gains that are totally tax free. No capital gains.
You have many options here, such as cleverly buying long-term storage food with friends to save even more now and profit later.
Millions of people are watching their life’s work being frittered away due to purchasing power degradation the government says does not exist.