It can not be denied again by anyone, fiat money is money that has no intrinsic value continues to decline in value over time. It's just that the majority of us do not realize just how bad such impairment.
The majority of us be fooled by short-term view of where the value of paper currencies fluctuate as each other, sometimes up and sometimes down. This is true if we use reference is a fellow of paper money.
The rule is a child weighing scales must have a fixed weight. If we want to weigh the cucumbers in the market for example, we can not weigh the scales of cantaloupe with a child - because the weight of both is uncertain. Children weighing scales must be certain and proven.
Similarly, assessing the purchasing power of paper money; amount of money only has value relative to the currencies of U.S. $ for example - but the purchasing power of real or absolute values can not be determined by comparing the amount to U.S. $ - because they do not have an exact value and reliability.
So what can we use to measure the value or purchasing power of paper money that accurate?. Or gold dinar was one of the most accurate answer and has been tested for thousands of years.
Besides using the standard gauge and tested, measuring the value of the currency should also be made in sufficient time range, eg 50-10 years or even more. Why is that?, Because if the timeframe is used only short term - for example in a single year, people can be fooled and wrong decisions.
Note the picture above as an example. Within one year, when measured with scales of gold even if (as a comparison of raw values) - then the volatility of the currency seems only natural.
There is a currency whose value is higher than that of gold yen (up 18%); While the U.S. $ and Sing $ is relatively fixed (respectively 'only' dropped 1% and 5%).Meanwhile, the euro fell 11%, the rupiah fell 16% and the worst pound fell 27%.
To take important decisions related to our long-term investment just as children's education expenses, the cost of building a house, medical expenses and pension funds - we have to use glasses purchasing power of money in the long term.
Consider the graph in addition to illustrating the value of the purchasing power of fiat currencies, when measured by standard scales of gold or the value of the dinar in the time span of ten years.
We can easily see in the chart that only in less than ten years (in 2009 we used the January data only weeks to 3), no-one any fiat currency that can survive to maintain the value of its purchasing power.
U.S. $ which he mighty, within the time the purchasing power of gold bought live 32%, while the euro stayed 42%, 37% lived Yen, Sing $ to live 36%, 28% lived Poundsterling and our beloved currency Rupiah stay 21%! .
When the rate of decline in the purchasing power of fiat money the last ten years is like a graph and the figures above, then anyone who can guarantee that the trend of the next 10 years will not run like this, or even worse to see the development of the global financial crisis last year?, Please You use your own assumptions.
So what is the importance of these two graphs (for more detailed graph please click on the graph) on the management / financial planning and investment we all?. For short-term needs - one year or less for example, the use of fiat money can be still quite safe - if financial conditions nationally or globally walk without great turbulence.
In contrast to the management / financial planning and medium to long term investment; Gold Dinar can maintain its purchasing power throughout the ages - is one obvious answer. Allaah knows best.
