Saturday, August 20, 2011

An Interesting Experiment

Above is pictured a quarter dollar minted in 1950. It consisted of 90% silver and 10% copper. If you carried a paper dollar (silver certificate) to any US bank in that year you could exchange it for four of these quarters. Also in 1950 this writer with one dollar purchased 4.9 gallons of gasoline i.e. just under 20 cents per gallon for his first automobile, a 1936 Ford 5 window coupe.

Beginning in 1965 the US mint discontinued issuing quarters containing silver and substituted other base metals. Coincidentally, paper dollars although closely resembling the earlier silver certificates, miraculously morphed into what all US paper currency is today: “Federal Reserve Notes” i.e. 1 a :  a written promise to pay a debt;

On Friday last, 19 August 2011 that 1950 quarter was nominally worth $7.76. What seems to be transpiring here can only be categorized as theft and deception. Our coinage has been debased by the government mint to the status of trolly tokens and our fiat paper currency is produced by printing presses and computer keystrokes backed by nothing but promises by a “private” central bank called the Federal Reserve. Meanwhile legal tender laws enacted by avaricious politicians force us to accept these bits of junk and wood pulp under penalty of imprisonment.

Meanwhile, the media is wall to wall “election” coverage of an event 15 months in the future. Dr Ron Paul who is virtually ignored is the only presidential candidate mentioning this problem and when even discussed is dismissed as a “crackpot”.

Sign at Ashland, Oregon Gas station May 2011

We are in deep trouble.


Unknown said...

The real (inflation adjusted) price of gasoline was about $2.50 in 1950. That's 29% below current prices but higher than real prices from 1986 to 2004.

The main reason gasoline prices are so high is not devaluation of the dollar (which does affect price) but because of a four-fold increase in demand for oil by China and India. Restrictions on drilling and building new refineries has not only contributed to higher prices, but also more price volatility. Gasoline taxes have also gone up in the past 61 years, accounting for some of the price difference. Also, mandatory cleaner burning blends have increased fuel costs - a tradeoff of price for air quality.

With increases in fuel economy, a gallon of gas can carry you a lot farther than it used to. And because of economic growth, there are more things you can do within a gallon's worth of gas than there used to be.

And i dont think you want to go back to 1950 wages, technology, availability, and quality. Families back then were lucky to own one car, much less two or three. I live in a home built in 1947 - you would not want to live in a house this small which was considered "affordable" for its time.

Unknown said...

Sorry for the overflowing link