There are two important facts to know about our current un-backed paper fiat dollar.

1. All paper fiat currencies fail, 100% of the time, with no exceptions.
2. If you put the power to create unlimited amount of currency (paper money) into the hands of bankers and politicians you are guaranteed that power will be abused and the currency will be destroyed.

The destruction of your currency takes the form of rising asset prices and artificially low interest rates, which prompts business, individuals, and governments to over borrow. The result is an over-indebted society that can only be propped up with ever increasing levels of new debt. Sound familiar?

The Federal Reserve and other Central Banks are taking the classic approach to this problem: print money to keep the game going. The result of this policy is guaranteed and Europe, Japan, and the US are all sealing their fate to either a deflationary depression or hyperinflation. My view is we are going to see pockets of deflation (like the housing market) and massive inflation leading to hyperinflation, which can be seen clearly happening right now in the rapidly rising costs of food, oil, gold, and other commodities.

This process will continue as long as the global financial system is willing to accept any US dollars and dollar-denominated debt. However it is plain to see that the world has already begun to position and protect themselves against our currency. For instance, China is spending its reserves of Treasuries as fast as possible and securing vital natural resources around the world, and many other countries have stopped buying our debt and are shedding their Treasury Bonds quickly as well. Right now the Fed is buying a whopping 70% of our own debt and as it becomes increasingly the "buyer of last resort" we'll soon enter the final stage of this process in which the Fed buys ALL the bonds issued by Treasury directly.

When that happens no sane person or country will want to hold dollars and we'll see a wholesale flight out of the currency and into pretty much any real asset. This can be defined as inflation, but really it will be a total loss of confidence in the currency. And at the end of the day the only thing keeping this game going is confidence, as in "backed by the full faith and confidence of the US Government."

For the average person the question is, "What to do?" The answer is so simple because it is the traditional and sane strategy that has worked countless times in history. Starting right now simply move a portion of your purchasing power out of the failing system and park your wealth into gold and silver. If you take only one thing away from this article please make it this: Gold is real and eternal money, it has always had value, and is the most trusted form of money in the world and throughout all time. That is a good track record. As Voltaire said, "Paper money eventually returns to its intrinsic value -- zero".

So let's review this quickly. All paper currencies fail. Gold is eternal money. You have a 100% exposure to the Dollar and dollar-backed assets.

You and your family need some real money. You need gold and you need it now.