First of all, we need to understand the difference between money and currency. Gold/Silver is the real money. Currency is just a proof that you have money. Previously, you could take your currency to the bank, and the bank would give you your share of gold to you. But, after 1971, it was no longer the case. The currency lost its anchorage to the gold, and now have become a “fiat” or “floating” currency. This has devastating consequences. On the top of that, the Federal Reserve is a PRIVATE ENTITY, the stockholders of which are unknown and has been kept as a secret! They can print as many fiat currencies as they want without having to be backed by gold. The entire monetary system is based on faith. The dollar bill is as good as a piece of paper. Printing a one dollar bill can be done at an expense of 3 cents !

Another important thing to keep in mind is that WE are the one who are giving value to money. The fact that people need to work hard to earn a fake piece of paper in return is what gives value to the currency. The funny thing is that the interest that we pay goes to the stockholders of the Federal Reserve, who are still unknown. While the country is doing a lot of deficit expending in public works, military and some bogus research projects, we and our future generations are the one who have to pay the price. All for just some pieces of paper which are backed by absolutely nothing!

Having that being said, the real question is: What can we do now to get out of this rabbit hole? The answer is: In order to get out, we should prepare based on our goals for the future, our past experience, our status now, and predictions on what is about to happen next.

2008’s Housing Bubble: As Warren Buffet says, the public sentiment about investing on the real estate is always backed by the interest rate. As the interest rate is lowered, people take more loans. As they take loans, money/debt is automatically created and there is a surge of fiat currencies in the country. When that happens, people tend to spend their money more and more and the prices of everything heats up slowly. This happened in 2008 too. The government started giving debts to big investors and individuals at a lower interest rate which pumped up the bubble more and more, and like every other bubbles, it popped in August, 2008. Lets analyze this plot aside which shows the average housing price, price of 1000 ounces of gold, and the ratio of average cost of housing in the U.S. to the price of 1000 ounces of gold from the year 2000-2024.

What can we learn from the plot aside?

It is true that nobody can predict exactly when to buy gold or sell houses at the same time, but we can have a glimpse of what is possible. For the time being, lets say we are only considering the time frame from 2000 to 2025. Lets say we sold one real estate in 2000, buy and hold gold/silver with that money, up until 2011. Then when we see the gold prices beginning to drop and real estates rising slowing, recovering from the 2008’s market crash, say we sell the gold/silver/real money we hold and buy real estates. We could buy multiple real estates with our money, and if we are feeling excited, we can buy 5 times more with 20% down! So, our ultimate goal is to get as much real estates as we can, and the gold/silver investment is just a way to get there safely, surviving the strong headwinds. When we feel some tailwinds in the market, that’s when we make the switch!

BITCOIN

Bitcoin is the largest cryptocurrency by market capitalization. It boasts the most secure crypto infrastructure, although it lacks solid anonymity. Statistical techniques and pattern analysis can potentially reveal Bitcoin users. In the future, it could become the most liquid digital asset. However, Bitcoin relies on an energy-intensive proof-of-work consensus, which makes its network slow and rigid. The maximum number of bitcoins that can be mined is 21 million, with 19.9 million mined so far. The remaining bitcoins are expected to be mined by 2140.

PROS

• Most Secure Crypto Infrastructure

• High liquidity

• Immune to Inflation

What about crypto currencies? Are they real?

In 2009, just after the housing bubble popped, an anonymous guy named Satoshi Nakamoto published a white paper with the idea of a global currency: Bitcoin. It is now being called as the digital gold. The basic idea behind bitcoin is that it is an encrypted text which cannot be decrypted. It can be transferred from the owner to another account without the intervention of 3rd parties like banks and credit card companies. If this text gains some value through the users, now it becomes money which can solve the double spending problem! And, since it is based on blockchain technology, the transaction is stored simultaneously on millions of computers throughout the world, such that even if one computer remains, everything can be traced back! Therefore, it cannot be hacked or closed by any government of the world. And the world receives its first decentralized currency to depend on which is not affected by the geo-politics.

What gives value to the bitcoin?

What gives value to gold and silver? Their limited availability in nature itself. If there were infinite amount of gold and silver in the nature, they would have lost their value. The “fiat” currencies that we use today can be printed in infinite amount; therefore, their value will eventually go to zero unless they are backed by something with real value in the future. Here comes the bitcoin. Similar to gold and silver, there can only be 21 million bitcoins by its definition, which is what gives value to bitcoin. The only problem is regulations from the governments. Trump has already said that they will set the necessary regulations to facilitate the use of bitcoins. In fact, bitcoin gained value from 67k$ to 100k$+ right after Trump was elected as the president of the US. Moreover, US now bought 1 million bitcoins which clearly implies that this is really happening soon.

What is web3?

The internet world is always changing. Now they are getting prepared to switch everything to web3, which is like a new generation of internet. Unlike the recent internet, it is totally decentralized, meaning its ownership goes to the public and there will be no third-party intervention between the transactions made by the people.

What are ethereum, solana, hashgraph, etc.?

Bitcoin is like digital gold. Ethereum is like the software package where web3 will work. The web3 based applications will run on Ethereum, which was invented in 2015. Its like a highway, where cars (applications) will run. But sometimes the highway becomes crowded due to the excessive volume of the traffic on road. Here comes Solana. Solana is like a metro which runs on the top of the road without interfering the traffic. It will first complete the transactions and keeps the record of timestamps for later thereby circumventing the slow traffic in Ethereum. Now, these are all based on blockchain technology. There is something else called Hash graph, which was invented later on in 2018. Unlike the others, it is not based on blockchain, but something old known called the “gossip protocol”. This let’s Hash graph gain tremendous advantages over the blockchain based technologies. It solves all the demerits of blockchain: speed and capacity. However, it has been patented to Dr. Leemon Baird. The team has been cooperating with big industries to use the technology as their public ledger. It is currently forming its governing committee, which is said to be comprising of 39 members, a few of the seats are yet to be filled. It already includes some big names such as Google, IBM, LG, Tata, IIT Madras, Boing, etc. Though it has a great future prospect, it is still growing.