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Dave Morgan & Mike Maloney - Gold & Silver The Best Currency

By: Dave Morgan & Mike Maloney

In this video blog from Las Vegas, silver and mining stocks expert David Morgan of Silver-Investor.com and Michael Maloney discuss the fragility of the global currency system.

David recalls his mother’s reaction when he gave her a 100-trillion Zimbabwe dollar note. After looking it over carefully, turning it and feeling it, she said “Oh, if only this was real.”

“I explained to her that it was real,” David says. “What most people don’t understand, they see a piece of currency with a one and a lot of zeroes behind it, and they think it must be a ‘lot of money.’ But that’s the problem with paper currency; that’s the problem with the world’s currency system. No matter what currency you’re in, there’s not anything substantive behind any of it. In fact, I get the question quite often, what’s the best currency? The answer is none of them; the answer is physical gold and silver.”

For example, imagine what would happen if the communications systems went down for 24 hours: All bank wire transfers, credit card processing—basically the entire global monetary system—would come to a standstill. “The Federal Reserve used to have its own hard-wired system,” Michael adds. “I think it was 2004 that they went to the Internet. If the Internet system fails, everything stops.”

Virtually every investment--bonds, stocks, second mortgages—is in the “matrix,” David continues. “The only asset class that’s outside the matrix are gold and silver in physical form. Yet most people never stop to consider that.”

David is not predicting a communications breakdown, he explains—he’s simply trying to get people to think about how the fiat currency is set up. Every fiat currency in recorded history has ultimately gone the way of Zimbabwe’s notes. “China went on paper money eight times in its history, and every time it failed,” David says. Thirteenth century Italian explorer Marco Polo returned from China with many wonders such as silk and spices, David notes. But his greatest discovery may have been the Chinese currency system. “You know what he discovered? That the Chinese were willing to take a piece of paper as final payment….  And that is the system that is now pervasive throughout the entire planet.”

Michael Maloney
goldsilver.com/

Posted Wednesday, February 16 2011