I never get tired of illustrating the fall of the dollar. Many years ago, in Ouray (pronounced you-ray) Colorado, the beautiful Beaumont Hotel, sat empty, and not in good condition. It had been owned for many years by Whelan Phillips, and since I had bought three other historic hotels 32 miles away in Silverton, Colorado, I thought this would be nice to own and restore. I wrote Mrs. Phillips, and the answer was, “The Beaumont is not for sale.”
Quite a few years later, Mrs. Phillips had passed away and the Beaumont came up for auction. I bid, but was outbid by another, who spent at least two million on its restoration, and it turned out grand. While I was going through the old hotel, in the basement I found a pristine menu from Sunday, April 10, 1902. I had forgotten about it, and as I was going though some old books and papers, there it was. On April 10th 1902, a scrumptious five course meal was 50 cents. What would such a meal cost today in a swank hotel, as this one was, and after restoration, is once again. It is closed for the winter now, so I cannot check, but I’ll guarantee you that this meal couldn’t be touched, at say the “Brown Palace,” in Denver, for less than at least $60-$75.
Being a curious person, I researched and found some interesting prices in 1900.
The average yearly wage in 1900 was from $200-$400! No kidding! However in 1920, after WW I had been won with debt and paper money, just as WW II was, yearly wages had gone up from $1200 to $1500. But here are some prices of food in 1900.
A dozen eggs – 14 cents. A gallon of milk – 25 cents. A pound of sugar – 4 cents. Apples – 10 cents a dozen. Five pounds of flour – 12 cents. A Loaf of bread – 5 cents.
An ounce of gold – $20.67. An ounce of silver – 60 cents
For all purposes, in 1900, there were no cars, electricity, telephones, radios, TV sets, power tools, other than steam powered lumber mills.
My 3400 square foot, brick, Queen Anne style home was built for $8,000, in 1887 by a man named Townsend, who came from England with a lot of money, and he bought mines in Ouray, Telluride and Silverton. He named his home “The Townsend House,” and it is still called that. When it was built, it was in a suburb, and the town probably had but a couple of thousand residents. It how has about 20,000. Local realtors want me to list if for a million or more, but it’s not for sale.
For over 50 years, I have owned a 1941 flat bed, half ton ‘telephone truck,’ which was bought in Silverton for $400. I restored it 50 years ago, It’s now worth about $30,000, and I am toying with selling it.
The point of all of the above, is that quite simply, physical things, such as antiques, real estate, old clothes, numismatics, and gold and silver, are things which you can own, enjoy, live in, use, speculate with, or admire. These things can be assayed, as in gold and silver, or appraised by experts. If you have ever watched “Antiques Road Show” on PBS, you’ve watched amazed people be told that something they bought for few cents, are worth many times that, and I love to see them say “Wow,” which seems to be their first expression.
Liquidity
Most physical things can be sold, and usually at a profit, because unless the U.S. balances its budget and stops paying its bills with un-baked dollars, those dollars are absolutely guaranteed to lose value as each day passes, as the above illustrates. In 1900, the U.S. dollar was used to buy the gold, silver, real estate, dozen eggs, and 5 pounds of flour: The same U.S. dollar. Only the appearance has changed a bit over the years.
All have changed in dollar value and even though all can be liquidated, most are a bit difficult to find buyers quickly, as they may need to be assayed or appraised, and then advertised. Stocks can be liquidated quickly, but allow me to quote just one paragraph from a Journal column of a week ago. “Out of 672 launched of new exchange-traded funds so far this year, according to Fact Set, 28% are tied to a single stock and 25% are leveraged, amplifying the daily gains or losses of the underlying asset. Many of these ETF’s multiply the ups and downs of tiny, ultra risky stocks. At least three seek to double the daily gains or losses of cryptocurrencies, which are already convulsively volatile.” Sounds like nothing to me, but you decide. Millions speculate in such things as ETF’s every day, and un-countable lose also.
If you’ve bought your gold and silver from Colorado Gold, and want to sell it, just call whoever you bought it from, and they’ll charge you nothing, but you have to ship it. Simple? For goodness sake, do not store your surplus assets in anything but gold and silver, which you can easily get from us at 1% over our wholesale cost, and that includes the shipping to you.
-Don Stott. don@coloradogold.com
