Guest Post: 150,000 Cigarettes or 3,275 Ounces of Silver, by Gary Christenson

Suppose on January 1, 1995, over 20 years ago, you quit smoking one pack per day and bought silver instead

Assume:

• One pack of cigs per day at their average price each month over those 20 years in the United States.
• Instead of buying cigs, you purchased silver once per month on the last day of the month with the savings.
• Some states have higher or lower taxes than average. For example, the national average price for a pack of cigs might be \$6.50, while some states average over \$10 per pack. Use the average price for calculations.

Savings:

• One pack per day is about 150,000 cigarettes over 20.5 years. Given monthly average prices for cigs and silver, you would have accumulated about 3,275 ounces of silver, which at today’s diminished silver price is worth over \$50,000.
• Using the money saved from NOT buying two packs per day for over 20 years would be about \$100,000 in today’s prices. At the peak price for silver in 2011, it would have been over \$300,000.

When silver sells for \$100 per ounce will cigarettes sell for \$40 per pack? This isn’t as outrageous as it sounds. I remember buying Marlboros for 19 cents per pack back in ancient times. Cigarettes are about 35 times as expensive now as they were in my youth. The current price is \$6.50 for a pack, and 35 times that price would be about \$225 per pack. Outrageous! The loss of purchasing power in fiat currencies is also outrageous.

Other Savings:

What about driving to work? Assume traveling 50 miles round trip five days per week. Assume gasoline costs an average of \$4.00 per gallon (U.S. prices) and your mileage changes from 15 mpg to 30 mpg. Total savings is about \$145 per month, or the equivalent of ¾ of a pack of cigs per day. A more efficient car saves about 2,500 ounces of silver in 20.5 years.

You can do the math yourself, but consider some possibilities:

• Instead of consuming one \$30 bottle of wine per night, you drink two beers. Savings is about 13,000 ounces of silver in 20.5 years.
• Instead of a new Mercedes every three years, you might purchase a new Toyota every four years. This could be 26,000 ounces of silver.
• Instead of a new 150-foot yacht every decade, you might purchase a used 100-foot yacht every second decade. Many ounces of silver!
• Instead of a dozen new F-35 fighter aircraft … dream on!
• Instead of a three wars in Iraq … I can’t count the ounces of silver, but it is a huge number.

Another comparison:

According to Steve St. Angelo the major U.S. and European banks have paid over \$128 Billion in fines and settlements since 2009. He notes that the mine supply of silver in those six years totaled about \$113 Billion. The major banks have paid more in fines than the cumulative value of all silver mined in six years. Moving fiat paper around is quite profitable. The silver is real, but how real are the banking profits?

Summary:

• A pack of Marlboros cost \$0.19 many years ago. A typical price is now \$6.50. Since we use unbacked debt based fiat currencies, inflation is here to stay, along with occasional panics, periodic crashes, and wealth transfers to the financial cartel.
• Exchanging a small expense every day for a purchase of silver will create a considerable stack of silver over 20 years. The expense is gone, but the silver endures.
• We have choices as individuals and as nations. More silver and less fiat currency is, in my opinion, a good choice.

– Gary Christenson of The Deviant Investor