When I was a young kid growing up in the early 1960s I can remember the big, yellow Town Talk gas station on 28th Street located next to the Dairy Treat. Gasoline was $.30 per gallon in 1963, the year President John F. Kennedy was assassinated. A postage stamp was 4 cents and a gallon of milk was 49 cents. See the stats at: http://www.1960sflashback.com/1963/economy.asp
So it took one quarter and one nickel to pay for a gallon of gas. Today, it takes 15 quarters and one nickel for a gallon ($3.80 at BP). Why?
Some people say, “Aww … that’s just inflation for you. Those days of $.50 cigarette packs and $.75 movies are gone. Today things just cost more!”
Actually, the price of things relative to real, tangible things like gold and silver have not changed much. Let me illustrate for you.
- That 25 cent piece or quarter I had in my pocket in 1963 is worth $4.30 today!
- The reason is that our coins used to be made of 90% silver. The value rises beyond this “melt value” if the particular coin is rare (numismatic coins).
- In 1964, the silver content put into our coins by the U.S. mint was reduced from 90% to 40%.
- Today our coins are only worth the stated value, such as 25 cents.
Check out the facts about the value of pre-1964 silver coins here: http://www.coinflation.com/silver_coin_values.html
So the REAL price of gasoline has not increased … the purchasing value of your U.S. Dollar has declined! One US quarter and nickel dated 1964 or prior can be sold to any coin shop for $5.63, less a small premium — much more than the $3.80 gallon of gas!
This decline in the value of our currency has been going on since the Federal Reserve was established in 1913. The “Fed” (as it is called) is neither a Federal agency or contains a “reserve”, but is a private corporation owned by member banks, which is overseen by a board of governors — with the Chairman being appointed by the U.S. President. The Fed’s purpose is to maintain stability in the value of the Dollar and maintain full employment. Many argue the Fed has failed on both objectives. It is authorized to create “new” dollars to buy “assets” such as US Treasury bonds and bills. So our money is actually based on debt — US taxpayer debt. Since 1913, the buying power of the Dollar is down a whopping 97-98%! In 2011, the Occupy Wall Street crowd also protested to “End the Fed” … and now you know why.
Our Dollar’s value, which is measured against other things of value such as gold, silver or oil, has been steadily declining for a number of reasons — including Congress’ failure to manage spending and the national debt for several decades. You can’t spend 40% more than you take in with taxes and continue to go on without consequences! Today, the Fed actually buys about 70% of all U.S. Treasury debt being issued … about $1 Trillion annually!
Here is one other true story from my past. My Grandma, in her later years, was so tapped out financially that she gave each grandchild a crisp U.S. one dollar bill as their Christmas present. I still have this bill as a keepsake of my memories of her. Had she instead given us four 25 cent pieces, that gift which is still worth $1 would instead be worth $17.20 in current melt value for the silver content. Pretty remarkable, no?
What are you doing to protect yourself and your family from the ravages of the declining dollar? Many experts say it continues to decline 7-9% per year.