terms of wages, manufactured goods, services and real property.
First, let’s look at wages. Back in “the old days”--say, before World War I--the average wage for a working man was around one silver dollar a day. One day’s wage right now for someone that works at a minimum wage job (at $7.25 per hour) is $58 for an eight-hour work day. A more typical wage for a workman with experience is around $11 per hour ($88 per day.) One dollar (face value) in 90% silver pre-1965 coinage contains 22.5 grams of silver, or 0.7234 troy ounces per dollar face value. Today’s spot price of silver is $17.55 per troy ounce. So that makes a pre- inflation dollar (a true DOLLAR in silver coin) worth $12.79. (Or just think of it as roughly 13 times $1 in face value--“13 times face,” whether it is silver dimes, quarters, or half dollars.) So, to put things in perspective, it takes $6.76 in pre-’65 silver coinage to equal one typical day’s wages ($88 in the current fiat paper money). Thus, in terms of wages silver SHOULD have a spot value about five or six times its current value. By this measure, silver is now grossly undervalued.
Next, manufactured goods. In 1964 (the last year that silver coins were in general circulation in the U.S.), a basic blued-steel Colt Model 1911 .45 automatic pistol cost around $65 retail. Today, a comparable Colt M1911 (a Series 80) costs around $775 retail. So if you were to sell $65 face value of this cache of silver coinage at your local coin shop, and they offered you 12 times “face”--that would net you $780 in the current funny money. You could then easily go buy a .45 at your local gun shop with the proceeds. The bottom line: it is not pistols that have gone UP in price. Rather, it is paper dollars that have gone DOWN in purchasing power.
How about services? In 1964, a haircut cost around 75 cents, or perhaps $1 in the big city. My last haircut cost $14. I suspect that other services are comparable, whether it is your local dentist or your local brothel. (I trust and pray that neither of you will ever use the latter service.)
Now let’s look at the relative values of silver coinage and real property. In 1964, the median house price in the U.S. was around $18,000. Today, it is around $170,000. (A 9.4x increase.) If you had set aside $18,000 face value in silver coins in 1964 (18 bags of $1,000 face value each), and held them until the present day, they’d net you around $216,000 if you sold them to a bullion coin dealer. That is enough for an ABOVE AVERAGE house. So obviously silver coins have held their value far better than paper dollars. Anyone who sits on PAPER dollars for very long--at least dollars that aren’t earning much interest--is a fool.
I hope and pray that you keep investing in silver. You should acquire much more than this little nestegg.
In my opinion, you can trust tangibles (like silver and guns), but you shouldn’t put much trust in paper currency in the long term. To safeguard your net worth in the inflationary days to come, always remember: Don’t leave your earnings in paper money for long. As quickly as possible, convert it into tangibles, to protect your savings from the ravages of inflation. Consumer price inflation is mild now, but that probably won’t be the case in the near future. So adjust your way of thinking and doing business, accordingly.
Never forget: Inflation is a hidden form of taxation!
Divide these coins equally between you. Spend them wisely, and up until the day that the balloon goes up, spend them only as a last resort. And never forget their REAL worth.
Love,
Dad
As Andy tucked the letter back into the envelope, he said resolutely, “Yeah, Dad, you were right.”
Each of the Phelps boys was given one of the M39 bolt-action rifles in lieu of their first two months’ wages. The next day a few precious rounds of the hard-kicking 7.62x54R were used to sight in each of their rifles. Because that ammo was corrosively primed, Laine showed the boys how to carefully clean the rifles’ bores and bolt faces, making sure that they cleaned their barrels for several successive days, to be sure that all traces of corrosive priming salts had been removed.
The bunkhouse was soon decorated with a Monument Valley poster and maps from
Having the Phelps Boys at the ranch was a great relief to Lars, Beth, and Kaylee, who up until then were starting to feel the strain of guarding the ranch by themselves.
Lars’s morning routine was to first pray at dawn silently and then cuddle with his wife. Then he would sit up and put on his eye patch and his prosthetic hand. As needed, he’d put some silicone cream on the stump first. Lars had learned that the size of his residual limb changed during each day. Fluid pooled in the limb at night when the prosthesis was off, and was pushed back out when “Mr. President” was strapped on. Thus, the fit was slightly tighter in the morning than in the afternoon or evening.
Still in his pajamas, Lars did twenty rapid push-ups and forty sit-ups. Then he’d shower and get dressed. Before the Crunch, he would also read his e-mail and have a cup of coffee with breakfast. But both of those diversions soon became just memories. In recent days he would eat at the kitchen table with Matthew Phelps, who was the early riser of the Phelps trio.
19
Gainful
“As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
Lars and Beth Laine were cuddled in bed, by the light of a single candle. For the first time in many days, they rested comfortably, knowing that one of the boys would be on guard duty all night long, listening and watching for intruders. Beth asked, “How are we going to make do? Your disability retirement checks are still coming, but they’re a joke. The check for one month might buy a couple of days’ worth of groceries, if we’re lucky. And at the rate things are going, in another couple of weeks a check might just buy one can of beans.”
Lars sighed. “Well, we aren’t going to make a living on twenty acres in this country, especially with seven or eight mouths to feed. If we just barter for food and fuel, our stash of precious metals will eventually get depleted. It’s pretty clear that I need to look for work, putting my military training to use.”
“What? As a mercenary?”
“Not exactly. There are a lot of businesses in town that are doing a pitiful job of securing what they have. Whether it’s a burglary or a robbery at gunpoint, they know that sometime within a few months somebody is going to come and clean them out. It’s only the refinery that seems to have their act together so far, in terms of security. So I think I ought to go hire myself out as a security consultant. I could set them up some rudimentary physical security-maybe I could team up with one of the welding shops on that-and also train their employees on shooting and small-team tactics.” Stroking his wife’s back, he added, “Now that we discovered my dad’s guns and that silver, I also have some leverage in bartering situations. I’d like your blessing to poke around town and see what happens.”
Beth sighed, “That sounds good to me. You just be careful, and proceed with prayer.”
Upgrading the security at the Laines’ ranch went quickly, with the help of the boys. The main task was constructing an observation post (OP) with railroad ties. Lars carefully positioned it on a gentle rise fifty-two yards from the southwest corner of the house. From there, there was a good view of the house, barn, and bunkhouse.
