“Then,” in this case, really isn’t that far back. If you speak of “Then” usually, it may be a hundred or hundreds of years ago, and maybe even Biblical times. Let’s make it, say 87 years ago, or 1932, and ‘now,’ being the current date. In 1932, it was common for people to carry gold coins in their pockets, since they took such a little bit of space. Back then, the “Eagle” was a $10 gold coin, and the “Double Eagle” a $20 coin. The Double Eagle is the most common of the numismatics, so beware if anyone tries to palm one off on you for a fancy price. They’re common in the numismatic field, and they have .9675 of an ounce of pure gold in them; or a bit less than one ounce.
“Then” or say in 1932, a Double Eagle would buy 482 gallons of gas. Then, 482 gallons of gas, or the value of one Double Eagle, would take you in your 1932 Ford @ 15 mpg, over 7,000 miles! Today, a Double Eagle, or .9675 of an ounce of gold, will give you approximately 440 gallons of gas. Since modern cars get far better mileage than 87 years ago, your Double Eagle would take you about 13,200 miles @ 30 mpg.
“Then,” a Double Eagle, or call it $20 then, would buy you 427 gallons of milk. That’s a lot of milk! Today, your $20 would buy you 6.3 gallons of milk. “Then,” just imagine, $20 worth of milk would more than fill up 42 – 10 gallon aquariums…with milk.
“Then,” 87 years ago, a Double Eagle or $20 would buy you 675 dozen eggs, or maybe 20 of them would buy a new Ford. Today, $20 will get you ten dozen eggs, and it would take probably 2,000 of them to get a new Ford, and not a fancy one at that. I still have a difficult time realizing that you can spend $70,000 on a new deluxe pickup! My 1941 Plymouth truck sold for $400, brand new, at a Chrysler dealership.
Should you then, save in gold rather than dollars? Is that what this comparison says? NO! The comparison points out that the dollar has lost, at least in eggs, gas, and milk, about 70% of its value in 87 years. Had you saved in dollars, in 87 years, the purchasing power of a dollar would have shrunk by 70%. As I write this, gold is about $1280 an ounce, a very good buy in my opinion. Even at its current low price, a Gold Eagle, with a full ounce of gold in it, is close to 70 times the price in gold content and buying power of a Double Eagle 87 years ago. Had you saved in ounces of gold then, and kept them, you could still buy the same things today that you could then. The Fords? Maybe not, because the auto industry now has power and automatic everything, and compared to a 1932 Ford, they should be a lot more expensive, and they are, but milk and eggs haven’t changed.
Had you saved in gold 87 years ago, inflation would have had a minimal or maybe no harm to you, and if, during that 87 years, you needed some dollars, you could have sold a coin or two and had dollars to buy things at the price they were when you sold them. Had you died in the 87 years, you could have left the gold to your kids with no inheritance taxes.
Inflation comes on very slowly, usually anyway. During WW II, there was 50% inflation in just four years, because that war was fought with paper money, and it was damned expensive. I haven’t checked, but I’ll bet that gold went up just as fast then, as the buck slid, as it does now, with various ups and downs of all markets. Save in dollars? No. Save in gold? Yes. All very easy, and we do it for 1% over our wholesale cost, including shipping to you.
Why are gold and silver at low prices now? In my opinion, it is because of the Trump squabble with China over tariffs. They need us far more than we need them, and with the 25% tariff on stuff from China, it is a great opportunity for entrepreneurs to consider making Chinese stuff here, since they are 25% more expensive now than before the tariffs. Years ago, I considered making plastic combs out of scrap plastic to compete with Chinese combs, because that’s all I could find. I was going to make them red, white and blue and send a couple of guys on the road with them etc, but I got involved in something else. Try it one of you. I think it can be done, and compete with the Chinese, even with no tariffs! Don Stott – don@coloradogold.com