All we’ve heard throughout the past 5-10 years is “Peak Oil”. The phrase is used so commonly that no one bothers to analyze historical oil prices in a stable currency to see if in fact oil prices really are in a relentless exponential climb. While we may have seen peak oil production, prices are still a HUGE BARGAIN when viewed in correct historical prospective.
As can be seen with this historical chart courtesy Financial Trend Forecaster, nominal gasoline prices did not pass 0.50/gallon until 1975, a few years after the nation’s currency had been debased from silver to copper and zinc.
The Doc’s own father commonly retells stories of the “good old days” where he worked at the service station the his father (Doc’s grandfather) owned in the late 1940′s-early 1950′s. Pop recalls gasoline was 31 cents a gallon in the early 1950′s. In the 1950′s US coinage was still 90% silver. This means 3 silver dimes could purchase a gallon of gasoline.
What is the current silver value of 3 pre-1964 silver dimes?
According to Coinflation.com, as of May 20th, the value of a single US silver dime is
$2.5384713455 is the total melt value for the 1946-1964 silver dime on May 20, 2011.
So the value of 3 silver dimes is currently $7.59.
This means that priced in silver, gasoline would need to be higher than $7.60/ gallon to exceed the REAL cost of gasoline in the early 1950′s, a time viewed as STABLE and REASONABLE for gasoline prices!
Today in 2011, gasoline prices have recently been averaging ~$3.90/ gallon. This means gasoline is effectively 50% cheaper PRICED IN SILVER than it was in the “good old days”!
Furthermore, as recently as 3 weeks ago, prior to silver’s violent manipulated smash-down, silver was trading near $50/ounce, which means that 3 silver dimes were worth $10.73! This means that three 1950 silver dimes could effectively purchase 2.75 gallons of gasoline only a weeks ago, and in 1950, those same 3 silver dimes could only purchase 1 gallon of gasoline!
The reality is that the world economy has hit PEAK SILVER much earlier than peak oil. Silver has been in structural supply deficits since these same 1950′s! At current consumption rates (which will obviously change with much higher silver prices) silver supply is predicted to be completely exhausted DECADES before oil!
So the next time you hear your old man or granddad talk about the cost of gasoline in the “good old days” let him know gasoline is now only 15 cents a gallon- provided he kept his pre-1964 change or course!
(or a price gouging 20 cents a gallon at this Oregon station)