Saving: Good Idea. Very good idea.

Saving dollars: Bad Idea. Very bad idea.

Why? Because the idea behind saving is to accumulate wealth, but you can't accumulate wealth by accumulating something with diminishing value. Dollars have diminishing value, so they're a poor choice for something to collect.

The politically correct word is "inflation", but the accurate word is "counterfeiting". The Federal Reserve regularly injects new "money" it creates out of thin air into the economy. You or I could do that using a high quality Xerox machine, and when we got caught we'd go to jail. When the Federal Reserver does it, it's called "adding liquidity" and it's perfectly legal. But the Xerox machine in the basement is not functionally different from the Federal Reserve's "adding liquidity". The only difference is who does it and how big the operation is. When ordinary people add just thousands of dollars of "liquidity" to the economy using a Xerox machine it's "counterfeiting", but when the central banks pump in billions with computers, it's "liquidity". The small operator doing it is illegal, but the big one is OK. Are you following this so far? Good. I didn't say it made sense, I'm just trying to tell it the way it really is.

You keep hearing and noticing that the price of everything is going up. No, it's not. What's happening is the value of the dollar is going down. People complain that the price of gasoline is "too high", but that's not true. Gasoline costs about the same as it always has - the reason it takes more dollars to buy a gallon of it is just because the dollar you buy it with is declining in value due to the effect of the rampant Federal Reserve counterfeiting.

That's why a piggy bank - or any other scheme involving the accumulation of dollars - is a bad idea. If you want to save (accumulate wealth), you need to accumulate something besides dollars - something that has intrinsic value that can't be created by a Xerox machine or by a banker with a computer.

Oh, sure, the change you accumulate in your pocket is all dollar-denominated, so it's not easy or natural to accumulate anything else. What else could you put in a piggy-bank, after all?

That's fine. Go ahead and accumulate those shrinking dollars, but as soon as you've got enough put together, buy some gold. Better yet, buy silver. No one can counterfeit it or create it magically on a computer, so it will hold its value. That's how you accumulate wealth.

Learn more about this author, Paul Davis.
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