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The Great Devaluation

How to Embrace, Prepare, and Profit from the Coming Global Monetary Reset

By Adam Baratta
13-minute read
Audio available
The Great Devaluation by Adam Baratta

The Great Devaluation (2020) tells the story of an economy in crisis. The global monetary system is a house of cards perched on a mountain of debt that threatens to topple at any moment. The villain of this story is the United States Federal Reserve, whose short-sighted policies – which have only helped to line the pockets of the wealthy elite – have set us hurtling toward a downturn to rival the Great Depression. The stakes have never been higher for investors, but while fortunes stand to be lost, fortunes also stand to be made – by those who invest wisely.

  • Investors who want to know the best place to put their money
  • Planners who want to prepare for an uncertain future
  • Anyone who wants to demystify financial jargon and find out what’s really going on

Adam Baratta is a former Hollywood storyteller who has since become a leading voice in the field of investments and precious metals. He’s the co-owner of the company Advantage Gold, which is the highest-rated precious metals company in the US. In 2018, he became a best-selling financial author with his book Gold is a Better Way.

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The Great Devaluation

How to Embrace, Prepare, and Profit from the Coming Global Monetary Reset

By Adam Baratta
  • Read in 13 minutes
  • Audio & text available
  • Contains 8 key ideas
Upgrade to Premium Read or listen now
The Great Devaluation by Adam Baratta
Synopsis

The Great Devaluation (2020) tells the story of an economy in crisis. The global monetary system is a house of cards perched on a mountain of debt that threatens to topple at any moment. The villain of this story is the United States Federal Reserve, whose short-sighted policies – which have only helped to line the pockets of the wealthy elite – have set us hurtling toward a downturn to rival the Great Depression. The stakes have never been higher for investors, but while fortunes stand to be lost, fortunes also stand to be made – by those who invest wisely.

Key idea 1 of 8

Federal Reserve policies are responsible for the United States’ bloated national debt.

There used to be two certainties in life: death and taxes. Now we can add a third entry to the list government debt.

The US national debt is now over $26 trillion and rising at a rate of over a trillion dollars every year. It’s unlikely this will ever be paid off – the US hasn’t had a budget surplus in over 20 years, and each year the government has to borrow more money just to pay off the debt it already owes.

But how did we end up in this grim predicament? To answer that, look no further than the policies of the Federal Reserve, the central bank of the United States.

The key message here is: Federal Reserve policies are responsible for the United States’ bloated national debt.

The Federal Reserve, widely known as the Fed, has the authority to expand or contract the world’s supply of dollars, making it the most powerful financial institution in the world. In recent decades, though, it’s only used this power one way: expand, expand, expand. America’s egregious debt problem is just one of the unintended consequences of this one-sided approach. 

The main reason the Fed expands the money supply is to combat recession. During recessions, people normally hold on to their money and take fewer risks. So the Fed’s main strategy for stimulating economic growth is to make borrowing cheaper – that way, it’s less risky for people to take out loans that they can then spend or invest.

There are only really two ways to do this. The first is to slash national interest rates. The second is to engage in quantitative easing, which is basically just creating money out of thin air and pumping it into the system. This encourages banks to lower their interest rates, since when they have a lot of excess money on hand, they want people to borrow it.

The Fed doesn’t just hand out free money, though. Instead, it buys treasury bonds from private investors. Treasury bonds are a type of financial asset issued by the US government that private investors can buy and receive a fixed return on. In essence, it’s a way for the government to borrow money from the private sector.

When the Fed wants to pump new money into the system, it buys these treasury bonds back from private investors. Instead of paying with its own cash, the Fed simply increases the balance in the investors' accounts. 

But the side effect of taking treasury bonds out of circulation is that it makes the remaining bonds more valuable, which means investors are willing to buy new bonds from the government at lower interest rates.

And that means it’s much cheaper for the government to borrow money which, unfortunately, doesn’t encourage fiscal responsibility.

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