A journey back to 1964 proves Silver creates wealth
How often have you heard people waxing nostalgic over what prices were fifty, thirty, even just ten years ago? When you hear things like “I remember when gas was a quarter!“, it’s a little skewed because you have to take into account what the current incomes were at the time and a host of other factors.
Sure, they were making around $6,000 a year in 1964 when gas was indeed around a quarter (Google seems to suggest around $.27/gal), but there’s a lot of sites out there that can better illustrate the decline of the dollar. What I think would be more interesting is to illustrate the rise of silver relative to purchasing power.
Stodgy minds in the media like Jon Nadler, Kitco’s omnipresent bearish mouthpiece, love to suggest that metals ownership is only worth a small place in your portfolio to preserve wealth. Looking back through 1964, though, paints a different story.
As you know,1964 was the last time the US minted 90% silver coinage. Had you hung on to more of that face-value silver back then, your wealth would have increased substantially:
--In 1964, ten dimes could often buy you 10 McDonald’s hamburgers on a promotion. ($.15/e or 10/$1)
If you kept those dimes in your drawer, they’d be able to buy you 20 hamburgers today.
(Silver value: ~$23 . Burgers: $.99/e.)
--To fill up a 12 gallon tank of gas, you’d have to fork over thirteen 1964 quarters to do it. ( $.27/gal)
If you left those quarters in the back seat and found them today, you could get 20 gallons for it.
(Silver value: ~ $75. Gas: $3.70/gal.)
--To buy a new car in 1964 you’d need a massive stack of 3,500 old silver dollars. (avg $3,500/car)
If you saved that stack, you’d only need 1,281 of them to buy a new car today.
(Silver value: ~ 86,625. New car avg: $30,700.)
--With the left over silver, you could fill it up 986 times even with gas rising to avg $4.50/gal.
To purchase a new house in 1964, you’d need to lug fifteen 1,000 oz bars of silver to the bank.
(avg home cost: $19,000, silver @ $1.30/oz.)
--If you did a mortgage instead and kept those bars to buy a new home today, you’d just have to bring nine of them and get back a lot of change.
(avg home cost: $263,000, silver @ $32/oz valued at $480,000, leaving $242,000 left.)
You could use the remaining silver to:
1 Send your two kids through a four year college, AND:
2 Buy a year worth of groceries, AND:
3 Take your husband or wife to Hawaii, AND:
4 Prepay 5 years average healthcare costs for your family of 4, AND:
5 Donate 10x the national average to a charity of your choice, AND:
6 Hire a personal trainer for 6 months to get you eating right, AND:
7 Buy 128 hamburgers to throw a party after you’re sick of eating right!
1(avg $23k/year per kid = $184,000, leaving $58,000 left).
2 (avg $236/week for family of 4, leaving $45,728 left).
3 (avg $5,000, leaving $40,728 left).
4(avg $3,200/year, leaving $21,528).
5 (avg $1,100/yr donations, leaving $10,528).
6 (avg $100/hr x 4hrs/week x 26 weeks, leaving $128).
7 (avg $.99 x 129 = $126.72)
Wouldn’t you say that family that can afford to pay cash for a new home, go on vacation, pay for college, pay for groceries, pay for healthcare, make a big charitable donation, hire a personal trainer, and still have money left over for plenty of all-beef patties is pretty wealthy?
Absolutely. To be fair, you can’t ignore that in the example above the person lugging 15 1,000 oz bars of silver to the bank to buy a house in 1964 was certainly doing well. That stable of silver was worth about 3X the average yearly income of an American, and I suspect most people did not have that kind of reserve.
That said, if you look at 3X the average income of an American in 2012, you get somewhere around $150,000, which as we’ve demonstrated, does not even come close to buying an average home.
Silver has not only bridged the gap of inflation, it covers it multiple times over. It’s clear that one holding as much physical silver as possible will not only preserve their buying power, they will increase it by a substantial degree.
Banks are manipulating the stock market (and silver market, too), government bonds are tenuous at best, and dumping money into savings bears only a fractional percent of interest. Those looking ahead to the next fifty years would be foolish to ignore the value and wealth-creating properties of silver.
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