WTF Is The Debasement Trade [And How You Can Profit]

Governments are debasing currencies, causing inflation and diminishing purchasing power, making it crucial for individuals to invest in hard assets and productive equities to preserve and grow wealth.

• Governments historically and currently debase currencies, diminishing your purchasing power.

• Invest in hard assets like gold, silver, and land, or their modern tokenized equivalents, to preserve wealth.

• Consider productive equities and Bitcoin for protection against debasement and exponential wealth creation.

Debasement, a historical practice of governments devaluing currency, is currently active and threatens individual savings, exemplified by the Roman Denarius and the modern US dollar. This erosion of purchasing power, driven by excessive spending and money printing, is not expected to stop, forcing individuals to become speculators to protect their financial future. Profiting from this trend involves strategically investing in assets that retain or increase value against inflation.

Historical Debasement

• 00:00:28 The concept of currency debasement dates back to ancient Rome with the Denarius. Emperor Nero initiated the first significant devaluation around 54 AD by cutting the silver content by 20% to fund wars and infrastructure, a practice that continued for centuries until the Denarius became nearly worthless. This historical precedent demonstrates how excessive government spending and debt lead to currency dilution, ultimately collapsing public confidence and causing inflation.

Modern Debasement Dynamics

• 00:02:26 The US dollar faces similar debasement issues, having been severed from the gold standard in 1971 and now backed only by government faith. With a national debt approaching $38 trillion and annual interest payments exceeding a trillion dollars, the government's primary solution is to print more money, causing each dollar to buy less over time. This ongoing money printing is inevitable, as governments cannot admit to overspending, and will continue until hyperinflation takes hold.

Investing in Hard Assets

• 00:04:06 The easiest way to counter debasement is by investing in hard assets that cannot be printed or diluted, such as gold, silver, and land, which retain real value. While an ounce of gold cost $250-$300 twenty-five years ago, it now exceeds $4,000, illustrating its ability to preserve purchasing power. Modern solutions like tokenized gold (Paxos Gold, Tether Gold) offer the benefits of physical ownership without storage drawbacks, and gold stocks have shown even greater outperformance, increasing by up to 300% in the last year.

Productive Equities & Bitcoin

• 00:08:51 Beyond traditional hard assets, investing in productive equities—companies that produce essentials like energy, metals, and food—is crucial as their real value rises when currencies weaken. These businesses create tangible value regardless of the dollar's fate. Bitcoin is also highlighted as an 'apex predator of assets,' offering not just protection against debasement but exponential wealth creation, with a predicted 30% compound annual growth rate for the next 10-15 years, demonstrating its superior long-term growth against traditional assets and inflation.