Thursday, January 15, 2009

Real Silver Money

Here's a copy of my letter to the Editor of the Herald (Everett, Washington) which was printed in August 1999 --

August 25, 1999

Dear Editor:

Your editorial of August 25, which declares "pennies no longer make any sense," misses the "critical question." That pennies are virtually worthless makes perfect sense in the light of history. It has been said that those who ignore history are doomed to repeat it. Rising prices do not devalue money, the government does.

You state the government can make a penny for one-eighth of a cent. It follows that the government can also print a ten or twenty dollar bill for a lot less than one dollar. Up until the mid-1960s a dime was made of a measured amount of precious silver. Put ten of those silver dimes on one side of a scale and put a real silver dollar on the other side, and the scale balanced. The one silver dime was equal to one-tenth of the weight of one silver dollar. Back then, a gallon of gasoline cost twenty cents, or two silver dimes. Also, pennies used to be made of real copper, but now they are made of a copper-colored metal alloy, probably from recycled beer and soda cans.

Where twenty copper pennies used to buy a gallon of gasoline in 1964, now it takes 170 fake alloy pennies to buy a gallon. The gallon of gas hasn't changed, only the amount of "money" needed to trade for it, which is now stamped and printed limitlessly out of waste products.

No wonder pennies are thrown away in store parking lots. Counterfeits and fakes are worthless. Eventually, it will take a wheelbarrow full of pennies to buy a gallon of gasoline. This is where our money is headed, which was predicted thirty years ago. Nickels will be the next token to be thrown away, eventually followed by paper dollars. When the government produces a counterfeit coin or dollar and passes it off as eight times more valuable than it really is, it won't be long before today's gallon of gas costs eight times as much.

The "critical question" you missed is "why don't we learn from history?" Does anybody remember the phrase "not worth a Continental dollar" or the stories coming out of depressed Europe where it took a wheelbarrow full of paper money to buy a loaf of bread?

Royce Ferguson
Everett Washington

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