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 Replies: 14 / Views: 2,110 |
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Pillar of the Community
United States
979 Posts |
I was doing some "Back-of-the-envelope" math and looking at the difference between the value of a dollar in 1964 (last silver year) and todays dollar. Please check my rough calculations for any errors. Also note that I purposely do not keep the math tight, since these number essentially change day-to-day, even hour-to-hour. What I looked at was the silver value in a $1 of coinage vs its silver value today, retrospectively...  I believe it will make more sense when I show the numbers and get into it more. (only considering 90% silver) According to http://www.dollartimes.com/calculat...nflation.htm, $1 today would be worth only $0.13 in 1964! Talk about inflation... Then I took the value of $1 in 1964 silver US coinage, valued at $20.96 spot price (26 FEB 2013, Silver price US$28.98 per oz) From there we again look back at what that silver value of $20.96 would be worth in 1964. When we plug that in, it is worth $2.82! If you look at $1 to $21 (rounding), the silver coinage gained 2000% value (it is currently worth 2100%, or "21x") but I think a more relevant number is the $1 to $2.82! This shows relative value that silver coinage has held due to intrinsic value over fiat currency! So from there we see silver coinage has REALLY gained 182% value, or, it is worth 282% of what is was worth when it was struck! Of course, these number are for the LAST year of silver. Anything previous has gained even more value! Of course, silver is a bit down right now, basically it is safe to say: Silver US coinage is worth about 3x what it was worth in buying power in the final year of mintage, 1964.I feel this puts a real perspective on the "value of a dollar" in terms of fiat vs intrinsic value. Another interesting note is that the relative gas price is 60% higher now than then. The price then was $0.30, today about $3.80. Retrospectively that $3.80 translates to about $0.50. BUT! That same silver dollar in coinage can still buy MORE gas in todays market than it could back then at $0.30 a gallon! It would buy a bit over 3 gallons then, but $21 (silver value of $1 90% silver) divided by gas price of $3.80 = 5.5 gallons! WOW! Anyone see any holes in the math? Please post any corrections! Otherwise, just comment on what you think!  Edited by Broseph
02/26/2013 10:29 am
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Pillar of the Community
United States
2335 Posts |
I didn't double check your math. This comes up on a regular basis from people that believe PM's mimic or exceed inflation. How do those numbers work between 1980-2003 when PM prices were reatively flet?
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Valued Member
Canada
470 Posts |
did you know there is roughly 16 lbs of silver in one tomahawk projectile.(off topic but on target)  |
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Pillar of the Community
Israel
2420 Posts |
Quote:
This comes up on a regular basis from people that believe PM's mimic or exceed inflation There is no real reason for silver to mimic inflation. Due to changes in the silver supply and demand, price can go up and down in real terms (i.e. inflation adjusted). The good news are that since there is a finite amount of silver on earth, and we're not recycling nearing half of the industrial usage, silver will go up in purchasing power, until it is economic to recycle every tiny bit. The other alternative (realistic or not, I won't judge) is mining outside earth at a reasonable cost, which could keep the price down for a long time. |
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Pillar of the Community
 United States
979 Posts |
trdhrdr007,
$1.00 in 2003 had the same buying power as $0.42 in 1980. So the buying power of a dollar was more that cut in half in those 23 year. Silver value floated.
If you had money in the bank, it lost value probably at around the same rate that interest occurred (interest rates in public favor keep getting lower)
It looks like it would have been a wash either way, silver or just putting you money in the bank. However, anyone who held on to their silver through the 90s and 00s multiplied their investments 6x!
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Pillar of the Community
United States
2335 Posts |
Between 1980-1990 the interests rate for a 5 year CD was over 8%, & from 1990 through 2000 it was north of 4%. Ignoring the fact that rates the first few years of the 80's were over 10% a dollar invested in 1908 would have doubled by 1989 & would have grown to almost $3 by 2000. An ounce of silver stayed relatively flat throughout the same time period.....which means that the purchasing power of silver declined at the same rate as the purchasing power of the dollar.
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Pillar of the Community
United States
979 Posts |
Sure, but that is money you can't touch, I meant putting your money in an accessible bank account.
Of course, what good is that past info if it can't help us today? Good luck finding a CD with 4% these days... it really isn't much of an option in terms of investment, more of just a way of saving. The price of gas alone will raise alongside CDs making them all but useless. I mean, better than putting it in a hole in the ground I guess... but at least then you could dig it up!
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Pillar of the Community
United States
2541 Posts |
The big issue here is that silver prices are manipulated by the CTFC - ala when it hit $50 most recent, they just put the smack down on the price by raising margin requirements. I'm not sure I want to invest in a non-dividend paying security that is subject to manipulation.
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Pillar of the Community
United States
2335 Posts |
Quote:
Sure, but that is money you can't touch, I meant putting your money in an accessible bank account.
Of course, what good is that past info if it can't help us today? Good luck finding a CD with 4% these days... it really isn't much of an option in terms of investment, more of just a way of saving. The price of gas alone will raise alongside CDs making them all but useless. I mean, better than putting it in a hole in the ground I guess... but at least then you could dig it up! If you really need the money you can pull it from most CD's at any time by forfeiting any interest accrued. That's not a whole lot different from taking the hit from the spread on spot prices when buying/selling through a dealer. You are 100% correct about past info not being much help. It can be an indicator of what might happen but it's not a crystal ball. That also applies to the increase in the buying power of PMs. |
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Pillar of the Community
United Kingdom
4208 Posts |
Lets remember that roman coins were worth more in roman times than they are now... They are worth less than face in roman times, by and large. some day silver will be either worth thousands what it is now or a pittance. Planetary Resources is bound to find tons of the stuff all over the place. Soon as they get up there, ill add, I bet platinum and gold will tank.
Helium is where to invest. If I had invested when I heard of the issues (okay, so I was 9, I wasnt really able to) then id already have 10x the investment.
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Valued Member
United States
380 Posts |
Planetary resources? I assume you mean other planets?  We don't have a Space Program anymore. The Gov. won't even transport resources on the keystone pipeline from Canada. That's on our own continent right above us. With politicians, bunny and Alien huggers on board we'll never even put a mine on the moon. |
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Valued Member
Canada
470 Posts |
thanks @ Quote:
Articsparky for the . To the moon with the price of silver!, industrial and precious; if only for a season - how else will America diminish their debt other than war. |
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Pillar of the Community
United States
1126 Posts |
Great Math exercise, It could be used to show people what is actually happening to the Dollar  Gothic Florin Said: "I'm not sure I want to invest in a non-dividend paying security that is subject to manipulation." I could not agree with you more, "A Security" has the problem of Counter Party Risk. All Paper financial instruments do. And with the absolute corruption and manipulation of the Paper Gold and Silver Markets. Holding any of these Paper representations of Precious Metals is more than hazardous to ones building of wealth. Just ask anyone that had accounts with MF Global Physical Precious Metals on the other hand have no counter party risk. There value is intrinsic to the metals themselves. And as we are at the very beginning of the separation of the price between Paper and Physical Precious Metals, things are just starting to get interesting. I remember in the summer of 2009 when they manipulated the price of Silver I believe from roughly 17 down to 8 or 9 (Don't quote me) But it was a big smash. That was the first time we experienced a complete disconnect between the price of paper contract Silver on the Comex (Crimex) market.And the physical Silver. Just because the Comex spot was 8 did not mean anyone could find any Physical Silver for that price. The premiums I saw when I was even to find someone willing to sell physical Silver were between 5 and 7 over spot per ounce. More and more people are learning about this manipulation and are instead of dumping their metals on a smash they are buying. Meaning the Manipulators are having to put up more and more short Paper Silver contracts to get the desired smash in price. One day I believe a person will be very hard pressed to be able to find anyone willing to trade their Physical Metal, For Any amount of pieces of Paper Currency. Edited by stewart
03/03/2013 12:31 pm
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Pillar of the Community
United States
511 Posts |
A small McDonald's hamburger and fries cost a silver quarter 50 years ago. That silver quarter is worth over $5 today, and it would buy more than the small burger and fries at McD's. Honest money wins.
Edited by 3stooges
03/03/2013 4:58 pm
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Pillar of the Community
United States
979 Posts |
I see why people may not want to over invest in something that is manipulatable, but I get most of my silver from CRHing. I posted about my $1300+ silver score in CRH: https://goccf.com/t/143435One this I know for sure, $1300 in silver is better than the $150 in paper money I handed them :) |
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Replies: 14 / Views: 2,110 |
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Posted 02/26/2013 7:15 pm
