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275 sats \ 4 replies \ @freetx 3 Dec \ on: $1 in 1870=4 cents now econ
Really depends on how you calculate these things....there are 3 mains ways: (a) official/semi-official inflation data, (b) silver, (c) gold.
I think silver is actually the best, because up until 1965 it was in nearly all the coins. Since it was in actual circulation (unlike just a 'gold backing') therefore its scarcity effects could be assumed to have impacted prices.
$1 coin(s) = .85 oz/silver
Therefore 4 cents = .034 oz /silver
Current silver price is $58/oz, therefore 4 cents = $1.97
The problem with silver is that it’s value is primarily industrial rather than monetary and there are a bunch of uses for silver in technology that didn’t exist back then.
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The problem with silver is that it’s value is primarily industrial rather than monetary and there are a bunch of uses for silver
Maybe, but it has risen far less than gold since 1971. Up until 71' by decree the ratio was 1/35 - now the ratio (in prices) is 1/72.
Silvers 'industrial demand' has been far offset by its demonetization .... it seems that its biggest use was "coinage" before and that far outweighed its current industrial demand.
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It’s fair to note the offsetting factors but being subject to such fundamental changes in demand makes it suspect as a steady measure of value.
Gold has basically just been valued as a store of value the whole time and it actually helps that it wasn’t heavily used in exchange because that didn’t change radically.
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You're right. If you are going to compare it to gold and silver the decline in purchasing power will definitely be even worse.
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