Recently my bank started issuing $50 and $100 bills from the ATM machine. Every time I go to a store or restaurant to spend one these crisp bills, the clerk or the waiter either holds the bills up and scrutinize them like they are analyzing a diamond, or they call over a manager who is more qualified to determine of I am passing good paper. In some cases, like McDonalds, I can’t even give then any bill larger than a $20.
When I was a kid or even a young adult, I would have viewed getting paid in a $50 or $100 dollar bill as very cool and prestigious. If I would have had the ability to pay for goods or services with those same bills I would have thought I had arrived and achieved real success. However, I now look upon these bills as troublesome, embarrassing, and a general pain. Therefore, I will not use the ATM options where I get $50 or $100 bills.
The point of this is that this is the first time in my life I can ever remember having any preference for how I got paid in terms of currency. Money used to be money. Now, not so much. The moral of the story is that it is not so far fetched to believe that we, Americans, could suddenly change our perception of the value of US currency. It is more than plausible to think that as our government continues to debase the US dollar through printing, and deficits, and the resulting inflation that we decrease our belief, reliance, and perceived value of the US dollar. Such changes in our mindset would ultimately result in shifting our ownership to alternate forms of currency such as gold or silver or other hard assets.
As I write, I realize that I am making the case for what is already happening in our country… people are started to shift into precious metals because of their lack of faith or belief in US Government policies and the overall economy.
So what does this mean for your and your self directed IRA?
Well I think the point is clear. The Government has and continues to engage in polices that debase the US Dollar, and create the perfect storm for hyperinflation. This drives the citizens of the USA to look for alternative assets and investments that are not based in US dollars or that will be a hedge against the US dollar. That investment/hedge/asset is physical gold and silver in your self directed IRA.