Author Topic: 90% Silver Quarter Gas Purchasing Power For Last 50 Years  (Read 4605 times)

Offline bri

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90% Silver Quarter Gas Purchasing Power For Last 50 Years
« on: January 19, 2015, 07:26:07 PM »
I'm working on a project related to Junk Silver, and created a graph comparing the average cost of a gallon of gas versus the intrinsic value of a Pre-65 90% silver quarter for the last 50 years.  It is amazing that a silver quarter has always been able to buy around a gallon of gas over the last 50 years. 






Offline Prodigy

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #1 on: January 20, 2015, 08:41:35 AM »
Interesting stuff!

Offline Crazy Fox

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #2 on: January 20, 2015, 09:35:37 AM »
Junk silver is a great way to teach people that money is only worth what we say it's worth.

Folks tend to be suspicious when you offer to buy a silver quarter from their spare change jar for over 8X its face value. They then seem interested when you tell them that modern quarters are copper with just a thin silver "veneer," but quarters weren't clad before 1965. Then they look puzzled when you tell them that even old pennies are worth more dead, as scrap metal, than alive as currency.

Show them how much the new paper money color schemes look like Monopoly money, and it really sinks in: our monetary system is kinda funny!

endurance

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #3 on: January 20, 2015, 09:42:04 AM »
Of course silver is also worth only what we say it is. There is no inherent value to silver, gold or platinum. There is some practical value for what the material can be used for in industry, there is some longing to possess shiny things, too. But compared to gasoline, a material that has value because of it's utility in our daily lives, silver and paper money pale in comparison.

Offline TexDaddy

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #4 on: January 20, 2015, 10:50:42 AM »
...modern quarters are copper with just a thin silver "veneer,"...
Actually, modern quarters contain no silver at all. The "veneer" is a copper-nickel allow.

http://en.wikipedia.org/wiki/Quarter_%28United_States_coin%29#Copper-nickel_clad_series

Offline bigbear

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #5 on: January 20, 2015, 01:00:07 PM »
Of course silver is also worth only what we say it is. There is no inherent value to silver, gold or platinum. There is some practical value for what the material can be used for in industry, there is some longing to possess shiny things, too.

I completely agree in your inherent value comment.

But compared to gasoline, a material that has value because of it's utility in our daily lives, silver and paper money pale in comparison.

Except gasoline's value is based on the energy/production gained when it's consumed.  At that point, it's gone.

endurance

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #6 on: January 20, 2015, 01:40:09 PM »
...

Except gasoline's value is based on the energy/production gained when it's consumed.  At that point, it's gone.
But it does work.  Gold and silver, like dollars, can be traded for work done.  Coal, cordwood, gasoline, etc., they all actually do something useful, whether it's boiling water to make steam to make some other form of energy (electricity, for example) or combusting to make something move or keeping us warm, therefore, there's an inherent value.  That was my only point.  Just comparing.  If nobody wants gold, there's nothing you can do with it unless you just like shiny things.  Somebody will always want sources of energy and sources of food because they are essential to life itself or do things that can't be done without a great deal of labor in their absence.

Offline bri

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #7 on: January 20, 2015, 08:31:04 PM »
But it does work.  Gold and silver, like dollars, can be traded for work done.  Coal, cordwood, gasoline, etc., they all actually do something useful, whether it's boiling water to make steam to make some other form of energy (electricity, for example) or combusting to make something move or keeping us warm, therefore, there's an inherent value.  That was my only point.  Just comparing.  If nobody wants gold, there's nothing you can do with it unless you just like shiny things.  Somebody will always want sources of energy and sources of food because they are essential to life itself or do things that can't be done without a great deal of labor in their absence.

Silver does have quite a few industrial uses, but I see what you are saying by contrasting it to materials that can produce energy.  What I find interesting is that gold and silver have been highly valued for thousands of years.  Way back then they would have had few industrial/practical uses.  It is odd that such value has always been placed on them - you would think that 2000+ years ago people would have found only very practical items and necessities (i.e. food, energy, etc.) very valuable, rather than gold and silver..

Offline bri

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #8 on: January 20, 2015, 08:44:43 PM »
Here is another interesting chart...

Seigniorage is the profit the Mint makes from coins.  For example, if it costs 5 cents to make a 25 cent quarter, then the Government has a 20 cent seigniorage profit on each quarter. 

When dimes/quarters/halves were 90% silver the Mint made very little seigniorage due to the cost of the silver.  When they switched to the much cheaper copper/nickel clads the seigniorage profit went way, way up ($800 million in 1967 alone). 



Data Source: "Annual Report of the Director of the Mint" Treasury Department reports from 1961 to 1970. 

Offline bigbear

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #9 on: January 21, 2015, 09:24:08 AM »
But it does work. 

Fair point.  You could say that currencies measure work at it's purest form.  Work (or making work more efficient) will always be in demand.  But as a store of value (i.e. work done), gasoline has gaps because it's consumable.

endurance

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Re: 90% Silver Quarter Gas Purchasing Power For Last 50 Years
« Reply #10 on: January 21, 2015, 09:54:59 AM »
Ultimately, it's a supply and demand driven world. No, you can't store gasoline as a tool to preserve weath. But those who can produce it and control the market will always be wealthy. You can store food and it will always be a hedge against inflation, but that doesn't work well with fruits and vegetables. You can own productive land and produce your own food, but the tax man can also take it away, so do you own or just rent from the state?  There is no perfect way of preserving wealth. I do own precious metals myself, but watching the value drop nearly 25% in October 2008 from their peak earlier that year while the entire market fell made me rethink the absolute value I'd associated with gold and silver. Now I'm much more diversified, but also more mentally prepared to live a more simple life if that's what times call for. I won't cling to a lifestyle that is unsustainable when the bottom falls out. Ultimately, that's what I think many precious metals fans think they can do and I'm much more focused on personal resilience than living with the illusion that these good times can go on forever, regardless of how well we prepare.