Find Out From Venezuela Why We Should Buy Gold
Everybody is telling us that we should buy gold but Venezuela is the perfect example why we should buy gold.
The message sent from that far country is highly important so we should really try to pay attention to it.
This year the president of Venezuela, Hugo Chavez devalued the bolivar by half.
This move doubled the cost of the important goods and reduced by half the purchasing power of the Venezuelan people.
This would also have reduced the savings of people by half.
Chavez has justified his decision by saying that this is a method of boosting the productive economy, to reduce imports that aren't strictly necessary and to stimulate exports.
A simple analysis will prove that this would be the effect that they will get.
People will feel discouraged to work when they see that their wages and their power to purchase basic products can be cut in half like that.
Anybody that has converted their savings into gold, or at least part of them are now protected against the decisions taken by the president.
This means that people's earning have been preserved in the face of this situation.
The purchasing power of gold compared to goods such as food, energy and shelter remains the same or it has risen a little bit.
What we have to realize that our government could do the same thing at one point of another.
Governments have boosted spending in an attempt to repair a falling popularity in the face of an election.
The consequence of their actions is that the national currency has been losing power.
We can now buy considerably less medicine, food, energy and anything else you can come to think of than it did a couple of years before.
Of course we cannot compare our government with the Chavez government as I seriously doubt that anyone would want to ban singing in the bath or in the shower.
Chavez's explanation for this type of measure that he tried to enforce was that people should not be distracted from the "basic business of washing".
I believe that we are far from becoming the next Venezuela but we should definitely learn from their unfortunate experience and try to secure our future.
The message sent from that far country is highly important so we should really try to pay attention to it.
This year the president of Venezuela, Hugo Chavez devalued the bolivar by half.
This move doubled the cost of the important goods and reduced by half the purchasing power of the Venezuelan people.
This would also have reduced the savings of people by half.
Chavez has justified his decision by saying that this is a method of boosting the productive economy, to reduce imports that aren't strictly necessary and to stimulate exports.
A simple analysis will prove that this would be the effect that they will get.
People will feel discouraged to work when they see that their wages and their power to purchase basic products can be cut in half like that.
Anybody that has converted their savings into gold, or at least part of them are now protected against the decisions taken by the president.
This means that people's earning have been preserved in the face of this situation.
The purchasing power of gold compared to goods such as food, energy and shelter remains the same or it has risen a little bit.
What we have to realize that our government could do the same thing at one point of another.
Governments have boosted spending in an attempt to repair a falling popularity in the face of an election.
The consequence of their actions is that the national currency has been losing power.
We can now buy considerably less medicine, food, energy and anything else you can come to think of than it did a couple of years before.
Of course we cannot compare our government with the Chavez government as I seriously doubt that anyone would want to ban singing in the bath or in the shower.
Chavez's explanation for this type of measure that he tried to enforce was that people should not be distracted from the "basic business of washing".
I believe that we are far from becoming the next Venezuela but we should definitely learn from their unfortunate experience and try to secure our future.
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