Own more than you actually have

         Before getting into crypto, many of us paid little attention to how the current financial world operates. I, for one, didn't know much about fractional reserves banking or derivatives in the market. You'd hear financial jargon when you briefly stumble upon a financial segment on major news networks.

         In short, there is a lot of fake money out there. Your bank doesn't have all the deposits they took in. They lend them out to make a profit. That's why bank runs are bad for business. Derivatives aren't real things you are trading. They are price manipulation tools.

         For a long time, you may have heard the saying that bonds are safe havens during troubling times. Well, that would be true if the maths checked out.

         Sometimes, you have to read it to believe it. Take this Bloomberg article: https://www.bloomberg.com/news/articles/2023-01-25/boj-owns-more-than-100-of-some-debt-as-bonds-go-round-and-round.

         Here's an archived version of this article: https://archive.is/cR8Hc.

         It's crazy to think one could lend out an asset, buy that back, and count it again as your holdings. Well, I can assure you Bank of Japan is not the only one that does it. We should probably watch what the Bank of England, or any other central bank, does in the future.

         The article does show the breakdown of these >100% bond ownership.

         Does that practice make sense and make you feel safe? It sure does not instill confidence in me.

         It's no wonder the calls to return to sound money like gold and silver are increasing. Crypto came to be after the financial disaster in 2008. While this is no financial advice, you should mitigate risks from the incoming storm by having things that are real. I'm not saying you should get off fiat altogether, but don't go swimming in it. None of the billionaires you know are swimming in it.

         Own and control the things you possess. I believe that is one of the most important lessons we need to practice in the upcoming years.

Posted Using LeoFinance ^Beta