The Case for Accumulating and (Eventually) Using Silver Coins

I recently did a study of prices (food and gasoline) comparing the costs in the early 1960s with 2009 prices for the same items.  I chose the early 1960s because that was the last time 90% silver coins were in circulation.  It was common back then for people to go into a grocery store or gas station and pay for purchases with a few quarters or dimes.  The prices were that cheap back then.

For my 2009 food prices I looked at the prices in my local Safeway store in Portland, Oregon.  I was careful to only look at the regular prices, not the “sale” prices.  The problem one typically runs into when making price comparisons is that many of the food items have been reformulated or repackaged into different-sized containers.  There is a also a much larger variety of items available today.  To circumvent these problems I focused on items that I can remember seeing back in the 1960s.  (I’m giving away my age here.)  They were mostly name brand items that many people avoid today precisely because they are so expensive.

Government-paid economists often fudge the numbers by making excuses that the products under study have changed or that people will choose to substitute less expensive goods for the ones they formerly bought when the prices go up.  That’s clearly cheating!

I stuck with the name brand items so that the comparisons would be fair and honest.  I made sure that I studied only foods and brands that were commonly available both in the early 1960s and today.  Most meat, produce, and dairy products easily fit the criteria.  So does regular gasoline.  This way we have an accurate picture of how much food or gasoline a silver quarter or dime would buy then, and now.

For the purpose of this discussion I will limit the list to just the following 20 common items:

Year of Ad

Item

Cost Then

   

Unit

   

Oz. Silver Then

 

 

Cost Now

   

Oz. Silver Now

   

Qty./Oz. of Silver.

1963

Sliced bacon (Oscar Meyer)

$0.29

   

lb.

   

0.21

 

 

$5.29

   

0.40

   

2.5

1963

Mazola oil (24 oz.)

$0.69

   

bottle

   

0.50

 

 

$4.95

   

0.38

   

2.6

1960

Land O’ Lakes butter

$0.67

   

lb.

   

0.48

 

 

$4.99

   

0.38

   

2.6

1960

Beef, sirloin steak

$0.89

   

lb.

   

0.64

 

 

$4.99

   

0.38

   

2.6

1963

Kielbasa (Polish sausage)

$0.59

   

lb.

   

0.43

 

 

$4.49

   

0.34

   

2.9

1961

Cheerios cereal

$0.25

   

pkg.

   

0.18

 

 

$3.99

   

0.31

   

3.3

1963

Beef, chuck roast

$0.49

   

lb.

   

0.35

 

 

$3.99

   

0.31

   

3.3

1960

Pork chops (thin sliced)

$0.59

   

lb.

   

0.43

 

 

$3.29

   

0.25

   

4.0

1960

Flour (Gold Medal)

$0.49

   

5-lb. bag

   

0.35

 

 

$3.09

   

0.24

   

4.2

1963

Ham

$0.39

   

lb.

   

0.28

 

 

$2.29

   

0.18

   

5.7

1960

Del Monte peaches

$0.29

   

can

   

0.21

 

 

$2.15

   

0.16

   

6.1

1963

Potatoes (russet)

$0.39

   

10-lb. bag

   

0.28

 

 

$1.79

   

0.14

   

7.3

1963

Eggs, large

$0.45

   

dozen

   

0.33

 

 

$1.79

   

0.14

   

7.3

1963

Beef, ground

$0.45

   

lb.

   

0.33

 

 

$1.77

   

0.14

   

7.4

1960

Regular gasoline

$0.29

   

gallon

   

0.21

 

 

$2.69

   

0.20

   

4.8 gal.

1963

Onions

$0.15

   

lb.

   

0.10

 

 

$1.49

   

0.11

   

8.8

1963

Chicken (whole fryer)

$0.29

   

lb.

   

0.21

 

 

$1.29

   

0.10

   

10.1

1963

Green (bell) peppers

$0.05

   

each

   

0.04

 

 

$0.99

   

0.08

   

13.2

1963

Apples

$0.16

   

lb.

   

0.12

 

 

$0.98

   

0.07

   

13.3

1960

Bananas

$0.10

   

lb.

   

0.07

 

 

$0.59

   

0.05

   

22.2

Notice that I have priced the items both in dollars and in ounces of silver.  The prices (in dollars) are deceptive because, on average, prices for these 20 items have increased eightfold since the early 1960s!  The prices in silver tell the truth.  In most cases the prices (in silver) are somewhat comparable.  Many items even look “cheap” now, in silver terms.  That implies that the price of silver is too low.  But, that’s the topic of a different discussion.

Two columns show the prices in silver terms.  The column all the way to the right shows how many of each item may be purchased today with a single ounce of silver.  This is a useful table because, if the paper money completely fails, one can rely on the table to price foods and gasoline in silver.  One ounce of silver buys four pounds of pork chops, for example.  The same ounce of silver buys close to five gallons of gasoline or 22 pounds of bananas!

It’s easy to see that as little as 20 ounces of silver could take a family of four 1,500 miles over the highway while feeding them all along the way.  If the dollar goes all the way bad you are to find a store that’s open along the way you might be able to convince the manager to accept some pre-1965 90% silver coins because he would recognize them for what they are (real American money.)  The pricing is all you would have to haggle over.

Many people love the old (pre-1936) silver dollars.  It would probably not be difficult to convince a store manager to let you have a couple of pounds of ground beef, a loaf of bread, a bag of potatoes, and a box of Cheerios for one silver dollar!





Economics and Investing:

New climate strategy: track the world’s wealthiest. This is the sort of fallacious logic that foments envy, and inevitably class warfare. Yes, Americans do use a disproportionately large portion of the world’s natural resources. But we also create correspondingly more with those resources. The gross domestic product (GDP) of the US is tremendous. Here is an illustration. (California, just by itself is the sixth largest economy in the world.) Consider this: Why does Kenya Airlines have Boeing 747s in their fleet? Because someone in America builds them. Could those planes be made in Kenya? No, because they have neither the expertise nor the manufacturing infrastructure. Is this situation somehow “exploitive”? No! As my old friend “Jeff Trasel” says: “Please don’t tell me that I somehow magically ‘owe the world’ more because my ‘carbon footprint’ is larger. Well, so is my productivity!” I agree with Jeff. Carbon footprint calculations and swaps of carbon credits are nothing but voodoo economics and socialist scheming.

Credit delinquencies hit record high. (Thanks to GG for the link.)

Items from The Economatrix:

G8 Still Sees Economy in Peril

True Unemployment Rate Already at 20%

The MOAB continues to grow: Dem Senator: Second Stimulus Probably Needed

California’s Nightmare Will Kill “Obamanomics”

FDIC Insurance Fund: It Doesn’t Actually Exist

US Consumers Fall Behind On Loans at Record Pace

How Wrong Can You Get? (The Mogambo Guru)

Bartering catches the attention of the mainstream media: Make Purchases Without Cash

Abandon Ship
(The Mogambo Guru)

US Stocks Drop, Sending S&P 500 to Lowest Level Since April; Exxon Falls

Morgan Stanley Plans to Turn Downgraded Loan CDO into AAA Rated Securities
[JWR Adds: I think that they should dub this new unit their Silk Purse Transformation Division]

G-8 Spars Over Stimulus, Leave “Exit Strategies” Open

Yuan Deposes Dollar on China’s Border in Sign of Future for Global Trade

Dems Split on Stimulus as Job Losses Mount, Deficit Soars



Odds ‘n Sods:

H.H. and Hawaiian K. both mentioned this piece over at the Backwoods Home site, by Claire Wolfe: Preparing for Civil Unrest

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Randy K. sent us this history lesson: How the potato got hot; The foodstuff was once viewed as unnatural and dangerous. Its rise to a global staple may tell us something about today’s genetically modified crops.

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Richard S sent us a link to an amazing story: Do or die; A fellow soldier was impaled by a live RPG. For medics and a helicopter crew, there was only one choice

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From Cheryl: North Korea Believed Behind US And South Korea Cyber Attacks



Jim’s Quote of the Day:

“Keep your revolver near you night and day, and never relax your precautions.” – Advice of Sherlock Holmes to his close friend Dr. Watson, circa 1889, Sir Arthur Conan Doyle, in The Hound of the Baskervilles



Note from JWR:

Several readers have asked why I chose the Battle of Bennington Flag as the low key “OPSEC” identifier for SurvivalBlog readers. This was merely because that flag pattern is uncommon enough to stand out, yet it is nothing too controversial. (Versus, for example, a “Don’t Tread On Me” rattlesnake flag!) The Bennington flag does not have any particular historic significance vis-a-vis preparedness. But the flag looks cool, and after all, at Bennington, part of Burgoyne’s army got trounced.

By popular demand, I’ve just added Bennington Flag window/bumper stickers to my CafePress Stores. (They are also available by the 10 pack or 50 pack, at near my cost.)



Net Producer-Net Consumer Equations for Self-Sufficiency: Getting Out of the Pit

In a recent phone conversation with one of my consulting clients, I was asked why I placed such a large emphasis on living in the country, at a relatively self-sufficient retreat. I’ve already discussed at length the security advantages of isolation from major population centers in the blog, but I realized that I’ve never fully articulated the importance of self-sufficiency, at a fundamental level.

In a societal collapse, where you are in “You’re on Your Own” (YOYO) mode, it will be very important to be a net producer of water, food, and energy. This will mean the difference between being someone that is comfortable and well fed, and someone that is shivering, hungry, and thirsty, in the dark.

If you were to create computer models of a typical suburban home as compared to a small farm, they would probably present two very different pictures:

A typical suburban home is an energy pit. It generates hardly energy other than a bit of garden waste that could be used as compost, or fuel. A farm house on acreage, in contrast, can often be a net producer, especially if the farm includes a wood lot. (Standing timber that is suitable for use as firewood.) Properties with near-surface geothermal heat, coal seams, or natural gas wells are scarce, but not unheard of. I’ve helped several of my clients find such properties. For some further food for thought, see this article by Lester Brown over at The Oil Drum web site: The Oil Intensity of Food

A typical suburban home is a food pit. Just picture how many bags of groceries you tote home each week, month, and year. Compare than with the net volume of food produced by a small farm, or the meat produced by ranch. (For the latter, a ranch that is large enough to produce its own hay and grain is ideal.)

A typical suburban home is also a water pit, dependent on utility-piped water. But with a spring, or with well water and a photovoltaic or wind-powered pump, you can be a water exporter–charitably providing surplus water to your neighbors.

There are are of course some work-arounds for these limitations, such as installing photovoltaic power systems and rainwater catchments cisterns. But it is nearly impossible for a family to be a net producer of water, food, and energy, when living on just a small city lot.

Consider the inherent limitations of life on a “postage stamp” lot:

Limited acreage means that your house will always be a net importer of home heating fuel. Unless you live on acreage where you have a wood lot for firewood, you’ll end up on the wrong side of the production-consumption equation. Photovoltaics are practical for lighting and running some appliances, but the big energy loads like space heating, hot water, and kitchen range cooking exceed what PV panels can produce, unless you are a millionaire. Yes, there are substitute energy sources, but most of those–such as propane-but those-are also “imported.” Hmm… Perhaps it is worth the extra time and effort to find a retreat property that has a natural gas well, a coal seam or that is in a geothermal zone. At least buy a property with a wood lot, so you can heat your home and water with firewood.

Limited acreage and a location inside limits usually means restrictions on raising livestock. You might find a property that has been exempted or “grandfathered”, but without the room required to grow animal feed crops, you will still be a net importer. (You will be forced to buy hay and grain, rather than grow it yourself.)

In many jurisdictions, it is illegal to have a private water well in a neighborhood that is served by a public water utility. This usually has more to do with maintaining a monopoly, rather than any genuine worries about a public health issue. There are of course exceptions, such as older houses with wells, that pre-dated the advent of a water utility. In many jurisdictions, the owners of these wells benefit from grandfather clauses. If buying such a property, make sure that the grandfather clause exemption is transferable. (Otherwise, you will have to cap the water well.)

One of the great ironies of urbanized life in modern-day America is that there has been a great inversion. In 1909, it was dirt poor farmers that lived on acreage, while wealthy people lived on city lots. But now, in 2009, owning acreage is something that most people only dream of, for retirement. In the more populous coastal states, the price per acre of land that is within commuting distance of high-paying jobs has been driven up to astronomical prices.

Have you ever stopped to think why there are large Victorian-style houses falling into disrepair in some Inner City ghettos? This is because at one time, those neighborhoods are where rich people lived. They were nice, safe neighborhoods, and were conveniently close to work, shopping, and schools. But times (and neighborhoods) change. These days, most of the wealthy have long-since moved to suburbs or to the country.

If you decide that you must stay in the suburbs, then I recommend that you at least relocate to a stout masonry house that is on the largest lot that you can afford. When you search through real estate listings, some key phrases to watch for are “creek”, “grandfathered”, “mature fruit trees” (or “orchard”), “secluded”, and “well water.” Another key word to watch for is “adjoins”. It is advantageous to own a property that adjoins park land.

As I’ve often written, I recommend moving to a house on acreage in the country–that is if you can afford it, and your work and family situations allow it. But I’ll close with one admonition: Don’t bite off more than you can chew. There is no point on living on acreage if you have a large mortgage, and no working capital remaining to build up the infrastructure for genuine self-sufficiency. In fact, that would be “the worst of both worlds”, since you would have higher commuting costs, a bigger mortgage, and perhaps even a bigger annual tax bill. Owning non-productive land may be worse than owning no land at all.



Letter Re: How Do I Transfer Propane Between Tanks?

Sir,
You mentioned the liquid propane dual-fuel vehicle, and said “…if you have a large home LP tank”. So, how do I get the gas from the large tank, to the vehicle.” Is there a pump or some sort of device? Thanks, – Brad S.

JWR Replies: There is no need for a pump. Draining liquid propane from a tank, is a self-siphoning process. Talk to your propane delivery man. Tell him that you want to be able to refill your barbeque’s 20-pound tank from you main tank’s liquid withdrawal valve. The adapter fittings are made of brass, and fairly hard to find–but propane company employees know where they can mail order them. For a detailed description of what you’ll need, see this thread, at an RV Owners’ discussion page.



Influenza Pandemic Update:

Four Britons Die From Swine Flu; Tips to Help You Fight the Flu “Optimize your vitamin D levels. As I’ve previously reported, optimizing your vitamin D levels is one of the absolute best strategies for avoiding infections of all kinds, and vitamin D deficiency is likely the true culprit behind the seasonality of the flu — not the flu virus itself.”

Argentines question government as flu spreads

Swine Flu Worries Spark Cambridge Jail Riots

Northern Hemisphere Bracing for Fall Flu Carnage

Explosion of Swine Flu Deaths in Argentina

Homeless People Die After Trial Bird Vaccination In Poland



Economics and Investing:

Reader Paul W. forwarded this piece over at Real Clear Markets: Get Ready for 14 Percent Unemployment

GG sent this Wall Street Journal article: Big Banks Don’t Want California’s IOUs

DD sent us four articles on unemployment:

Unemployed fighting for their benefits

A map of weekly unemployment benefits by state and current unemployment rate by state

Low income families turning to outside sources to help with necessities

Retailers to lay off more workers

Karen H. also sent us another raft of articles:

Migrants are going to Britain, come hell or high water. “Gazing across the Channel in the direction of the white cliffs of Dover, Amir Gul stood on Calais beach and imagined himself on the other side – and living the dream that has brought him 3,500 miles from Afghanistan.”

G8 days numbered? “The Group of Eight industrialised powers, ineffectual in the face of the worldwide finance crisis, is slowly losing its grip on the global economy and now faces calls for its abolition.”

Debt Burden Quickens Power Shift as G-8 Loses Clout. “Different countries are pulling in different directions and that is, I think, quite troubling,” said Niall Ferguson, a history professor at Harvard University in Cambridge, Massachusetts. The uncoordinated response is “one of the classic symptoms of a global crisis.”

U.S. Home-Equity Loan Delinquencies Set Record in First Quarter

U.K. Factory Output Unexpectedly Dropped in May. “The recovery is not yet “guaranteed,” the British Chambers of Commerce said today, as rising unemployment in the U.K. and around the world threatens to prolong the worst global slump since World War II. Today’s U.K. manufacturing report comes two days before the Bank of England decides whether to continue its program of buying assets with newly printed money. “

An interesting link for keeping up with Chapter 11 Bankruptcy filings

Items from The Economatrix:

401(k)s as Dangerous as the Dollar Get your money out of 401(k)s now!

Calls Grow to Supplant the Dollar as Global Currency

Peter Schiff: An Obama Speech, Debt and China

South Korea to Buy Gold, Expecting it to Replace Dollar

Gold Could Shoot Through $1,000 if China Shifts Away from US Treasuries

Jobs Data Bodes Ill for the Future

How Bad Are Auto Sales? 10 Questions and Answers

A Goldman Trading Scandal?

Celente: Some Major Trends Forecast



Odds ‘n Sods:

Ed L. suggested this Wall Street Journal article: Guns N’ Grosses: Arms Makers Fall Back From Obama Surge. Methinks the next year represents a window of opportunity to stock up on guns, full capacity magazines, and ammunition at a discount prices–before MOAB-induced currency inflation kicks in, or worse yet, new civilian disarmament legislation is enacted. I recommend that you systematically round out your firearms battery , preferably with cash purchases from private parties at gun shows.

   o o o

Be sure to visit Bill Buppert’s new blog, titled Hezekiah Wyman

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Steve from Philly spotted this interesting piece in a Maine newspaper: Pay attention when chitchat turns to ammo shortages

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Tamara, from the always entertaining and decidedly hoplophilic View from the Porch blog, pointed me to this fascinating piece on old-time technology: Retro Tech Days.





Note from JWR:

I was a disgusted to see the large number of U.S. flags being waved at Fourth of July celebrations that were marked “Made in China.” The bitter irony of this is almost indescribable, especially when you consider that a good portion of Chinese merchandise for the American consumer market comes from laogai (“Reform Through Labor”) prison factories. Do America a favor, and buy yourself an American-made flag. OBTW, I’ve chosen the “76” Battle of Bennington flag as the official “OPSEC-conscious” flag for SurvivalBlog readers, to identify themselves to fellow readers. And, also BTW, I just had one of my kids create Battle of Bennington Flag logo T-shirts, hats, mugs, and tote bags to add to my CafePress store, for the same purpose. (For those readers that consider it too “high profile” to wear a “SurvivalBlog” hat or T-shirt.) By wearing either a SurvivalBlog logo, or the Bennington Flag, you may providentially meet folks in your town that are fellow SurvivalBlog readers.



Letter Re: Some Thought on Dual-Fuel LPG Vehicles

Dear Jim,
I don’t know if this applies to folks in the US, but it may be something for UK readers to consider. My main vehicle is equipped with both petrol and Liquefied Petroleum Gas (LPG) tanks, and I will also be installing an LPG system on my secondary vehicle. There are two main advantages to this:

1. LPG is less than half the price of petrol, and although you get a third less mileage than you do using petrol, it still works out cheaper – in fact, in the UK, you can get the installation costs back in around 18 months. Also, burning LPG as fuel is cleaner and greener. I buy mine from the farm supplies company around the corner, which is even cheaper still.

2. With both petrol and LPG tanks full, I can drive around 550 miles (on English roads, which have far more bends and stop-starts than US roads) without refuelling, even though my main petrol tank is only 15 gallons. That’s a big advantage. Two things to note: always deplete the LPG first, as the vehicle needs petrol to start; and the amount of LPG you can get in the tank depends on the temperature; the warmer it is, the more the gas expands in the tank and the less liquid you can get into it, which will affect your mileage.

There is a minor disadvantage in that places that carry LPG are not as common as regular fuel stations, and sometimes they’re tucked away on industrial estates – sometimes they are a tank in a farmyard! We keep a log of where known ones are, and we have a [GPS] sat-nav with LPG stations listed on it for traveling further afield. Most of the places we use are unmanned, and require a special key to operate, so if power is still working, the pump will still give you LPG. Perhaps that disadvantage could be an advantage in a SHTF situation.

I’m looking to devise a method of filling the vehicle tank/running directly with bottled LPG as a further fall-back. Blessings, – Luddite Jean, in England

JWR Replies: There are road tax issues, but propane conversion kits are readily available in the US for older “pre-smog” aspirated gasoline-engine cars and trucks, as well as more expensive conversions for newer fuel-injected engine vehicles. Used conversion kits for pickup trucks, usually complete with fuel tanks often come up for sale on eBay. And a few complete and running propane vehicles are also sold on eBay Motors. Used utility company trucks that are propane-powered or even dual-fuel occasionally get sold at auction yards. Watch the auction listings closely. Once in a blue moon, you will find a dual-fuel vehicle that is also a four wheel drive. If you find one like that, that is in good shape at a reasonable price, then jump on it!

I highly recommend getting at least one propane-fuel vehicle, especially for any readers that already have a large propane tank at home.



Letter Re: Home Heating Oil Price Fluctuations–Time to Buy Low

Hi Jim,
Some older neighborhood houses [in the Pacific Northwest] have large oil tanks for heating under driveways, in basements, and buried under yards. Last winter, we saw our neighbors run dry during a rare 2-week snow/ice event that even chained fuel trucks couldn’t get around in. Portland and Seattle are notoriously under-prepared for ice/snow on roads, and actually have a “intentional neglect policy” of letting it melt without salt/de-icer rather than clearing the roads. Prepare to walk on uncleared pavement and stay around home!

If the predictions of temporary global oil over-supply are correct and fuel oil drops to around $1.50/gal, filling or topping-off a 600 or 1,000 gallon tank at that price would be a prudent thing to do with any extra money in the budget or even savings beyond the 6-month emergency reserve. Over-supply and clearance-pricing will be temporary as OPEC and others throttle back expensive drilling and pumping operations while the supply chain clears and prices return to “normal”.

Even if a person is a renter, having a full heating fuel tank is a good thing. Some rental contracts make heating the building and a maintaining a minimum heating fuel level a requirement. The fuel in the tank remains the property of the renter, minus the amount that was there when they moved in (or language in the rental contract), and can be sold to the landlord, next tenant, or sucked up and moved by an oil company truck for a fee.

Filling before heating season allows plenty of time for sediment to settle in the tank before drawing it into the in-line filter ahead of the burner. Anecdotal commentary by furnace service men indicates that furnaces that run on mostly-full tanks have fewer burner problems than those that use “bottom of the tank” fuel. Farm and trucking supply houses have “fuel polishing” additives/fungicides and pump/filter systems that keep tanks and fuel clean that might be safely added to a home storage tank system. Being able to fill a five-gallon can of stored/filtered Home Heating Oil from a valved-spout in the basement might be useful at some point in the future [, since Home Heating Oil can be substituted for diesel fuel, in extremis]. Cheers, – Karl in Portland, Oregon