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Currency
I’ve just started rereading Terry Pratchett’s Discworld series. In the first book, he talks about the debasing of the currency of the realm. Has there ever been a government that didn’t debase the currency? The Federal Reserve was established to preserve the value of the currency, and a dollar is worth about $0.03 of what it was when the Federal Reserve was established.
So, my wife and I have a good chunk of change in the bank. The Fed shoots for an inflation rate of about 2%. Even at that rate, the money we have in the bank will have lost about 15% of its value in 10 years. How fast is it losing value at the present inflation rate of 11%? What’s the point of saving if the government is just going to inflate your savings’ value away?
Published in General
There are brands you get purchase online that are better than the stuff you get in the grocery store. More expensive though.
The Walking Dead teased an interesting plot point that ammunition would become the currency of that world, but they never followed up on it.
Money deposited by savers is supposed to be used by banks for investments, but central banks priced savers out of that market. Why would a bank solicit deposits from investors when the government gives them cash effectively for free?
That’s the whole theory behind of Keynesian “stimulus”. It’s still the government stealing wealth from the people without the need for a vote in Congress.
I like it fried.
Are there not private mints that produce “medallions” with no dollar value stamped on their face?
What’s the shelf-life of products like that?
Nah. Banks don’t put it to work anymore, not that way. And you certainly are not the beneficiary if they use the money. So the saver has squirreled, and inflation will eat away at it.
Silver coins have as far as I know always been 90% silver. In the early 70s (at least in 1971) Kennedy half dollars were 40% silver.
What brands would you suggest?
Just looking, I found 50 pound boxes of powdered eggs for $108, but the shelf life was only 9 months, and the bags were semi-permeable to allow for aeration and prevent mold, and the cost of shipping overland delivery to Texas was ~$45, and overnight or next day was ~$250 above the price. I guess you do have to search and probably buy locally.
I thought the government went to sandwich coins in the mid-60’s. We didn’t call them “Johnson quarters” for nothing. Did half dollars hold out longer?
50 lbs for $108 is less than 14 cents per ounce. With ground shipping is still under 20 cents per ounce.
But 9 months isn’t long enough, that’s like a restaurant package not a prepper package.
Yes, you can buy minted bullion in mini-bars and “rounds”, coin-like bullion. I looked at Canadian coins and their marked value was $1 Canadian for a gram, $3 for 1/1oth ounce, and $50 for 1 ounce of 0.9999 fine.
Properly packaged I’ve seen adverts saying the shelf life of some powdered eggs is 15 years. These are probably vacuum-sealed products.
And besides, vaults charge for storage and paper certificates of ownership are as precarious as any other promise or ownership. I you purchase gold, it’s probably better to have possession, and lose interest, but still hope to hedge against inflation.
I remember ads from some gold company that started out with something like how 200 years ago, an ounce of gold would buy you a fine suit/set of clothes. And it still does today.
Debasement by Henry VIII:
https://en.m.wikipedia.org/wiki/The_Great_Debasement
Debasement of the denarius by the Roman Empire:
https://en.m.wikipedia.org/wiki/Denarius
Debasement of Ottoman currency in the early nineteenth century:
https://www.google.com/url?sa=t&source=web&rct=j&url=https://ata.boun.edu.tr/sites/ata.boun.edu.tr/files/faculty/sevket.pamuk/pamuk_sevket_the_great_ottoman_debasement_1808_1844.pdf&ved=2ahUKEwi3t8GU7MD0AhUuRjABHR6sAfoQFnoECCQQAQ&usg=AOvVaw33OP6IRJ3Cb1eYX0COhuXP
Here’s a nice collection of debasement examples:
https://www.google.com/url?sa=t&source=web&rct=j&url=https://cepr.org/sites/default/files/Pamuk%2520-%2520oslo%2520text%2520June%25202015.pdf&ved=2ahUKEwjC18-V7cD0AhUWl2oFHfXUDu44ChAWegQIAhAB&usg=AOvVaw36V8h3LM-MD5SJCSsujHGq
American silver coins not being debased is a testament to good policy, not impossibility.
But probably keep it in a fireproof safe.
And a silver dollar still buys the same it would back in 1960.
A book that has been influential to me is by historian David Hackett Fischer: The Great Wave: Price Revolutions and the Rhythm History (1996). Fischer isn’t an economist and as far as I know this is the only book in which he has ventured into economic topics. But this book caused me to look at issues of inflation (and debasement of money) in a new way, and has been influential in the management of my retirement funds. Perhaps I am the only one of his readers who will say that.
Why should I care if it melts?
They’re freeze-dried, so pretty good. I mean, I haven’t gotten sick from eating powdered eggs that have been in my cupboard for a while. But I don’t have an actual number for you.
Oh, I’m a cheap ass who buys the store brand, so I couldn’t tell you.
Because if it’s not melted in your own safe, it’s no longer identifiable as yours.
Is that stuff that’s guaranteed for 25 years worth the money? Actually, 15 years would probably be enough to get me past my deathbed.
Lol. It will be in my house. I might even make a couple of bullets in case of werewolves.
Pretty sure you want silver for werewolves.
I have some gold in my portfolio. It’s not really an investment, it’s more like the last thing that has any value before we become barbarians again.
Food and/or fuel would become more valuable than gold, before that.
Dealers charge a premium over the bullion value for a coin. A one ounce coin right now is (depending on daily fluctuations) just under $2000.00 so a 1/10 ounce coin (a tiny sliver of metal) is worth just under $200.00
But the dealer will charge you a larger percentage fee to buy the 1/10 ounce coins — the larger the coin, the smaller the percent markup.
So I bought all 1/10 or 1/4 ounce coins at first. When I thought I had ‘enough’ of them to do smaller redemptions or purchases, I started buying 1 ounce coins.
I was a coin collector in my teens and accumulated a lot of silver dimes, quarters, half dollars and silver dollars. I also bought some junk silver coins later from a dealer. They are more plausible for exchange than even the smallest gold coin.
I read an account of the 1990s Argentine crisis; the author said for a while the only way he could buy anything was with silver and gold, because the paper money you paid for something in the morning would be worth a lot less at the end of the day.
Recently, even nickels are in play (just barely). Depending on the spot price of nickel, a US 5 cent coin can be worth a bit more than 5 cents in melt value. The only way this could matter is if we get into hyper inflation.