The Rules Have Changed

The old rules of money changed in 1971 when Richard Nixon removed the gold backing of our dollar. Money, which used to be backed by gold, became currency, backed by nothing but faith in the U.S. government.

In his daily Dow Theory Letters, Richard Russell sheds light on how these economic changes are affecting our lives.

Last week Russell shared a fascinating article by Paul Craig Roberts, Watching the Dollar Die. Roberts explains in his article that, without a gold standard, the dollar’s value is dropping like a rock. Inflation skyrockets and the Federal Reserve resorts to printing massive amounts of “money.” In fact, they’re printing so many paper dollars that the Federal Reserve stated in March 2006 that they will no longer publicize how much M3 currency they’re putting into circulation. The more they print, the less it’s worth!

Those who are playing by the old rules of “save money” and “diversify for the long term” will painfully see that this is a new game where the old rules do not apply.

Pioneering homeschoolers need to lead the movement for a relevant financial literacy which teaches our kids the new rules of money and prepares them for the economy they will encounter.