First, lets try to understand how currencies and inflation works.
There are two basic types of monetary currency, the fiat system, and the precious metals standard.
The Fiat System
In the fiat system, the value of the currency is a illusion, a magic trick. That green piece of paper (which isn't even paper! It's cotton and linen!) that you have in your pocket? It's only a dollar because the government says, 'This is a dollar.'
Now, this wouldn't necessarily be a bad thing if the government actually had the best interest of the people it 'serves' (extorts) in mind, but seriously, what in life is that easy?
Inflation in this system happens when the organization printing the money prints more money than there are goods being produced and circulated in the economy.
CREATING IMBLALANCE!
You see that? It's a cycle! The money goes from the bank, to the people for circulation, and eventually finds itself back in the bank.
Bank → People → Bank
But the number one problem of the fiat system is this! The bank printing the money is usually in most cases NOT a government agency or organization!
This has been true thought HIStory and wars have been fought over it!
So what happens when the government decides that we need more money in circulation, they have to get a LOAN from this private organization!
YES, this is true! You think your getting shit for free in America?
So now, the cycle looks like this.
Bank → (Debt)Government → People → (With interest)Bank
So... how are they going to pay this interest?
Easy! Get another loan!
That is modern economics, in a nutshell!
The Precious Metals Standard
This one should be easier to understand. Because in this case, it's not just, 'This is a dollar, because we say it's a dollar.' This time, it's 'This is a dollar, because we say it's a dollar, and we have a good amount of gold/silver/platinum/palladium/whatever we feel like using because it looks pretty and has interesting industrial properties and is rare. Hell, they can back up the dollar with diamonds if they wanted to!
OK, well, don't follow me up on that, Mr. Rothchild.
In this system, you can actually go to the bank and trade in your bills for whatever is backing them up, and just use that.
The ONLY time (to my knowledge) you have to worry about a system like this is when there isn't enough metal to back the currency up, thus shrinking the economy.
The same trick outlined above (printing more bills than there is metal to back it up, causing inflation) can still be applied by those who have nefarious intentions.
But this money at least has something solid to back it up! Without that, something like THIS can go down!
Thats UUGGHHLEEE!!
Gold and Silver
Why I like gold and silver? THEY HAVE VALUE!
They don't fluctuate! A certain amount of work goes into making a gold coin! The mining, refining, the minting!
It takes time, energy, and materials!
The only reason the price of gold and silver fluctuates is because the DOLLAR FLUCUATES!
It's that simple to understand!
It's not like stocks which is basically another illusion, a paper trick. I'm not knocking it though, you can get paid off it of you know what your doing!
Think of gold and silver as a way of storing your money. A bank that you can hold in the palm on your hand.
HOTEP!