Survivors – A Novel of the Coming Collapse

The last of the guns was a Lahti 9mm semiauto pistol with five spare magazines wrapped in brown waxed paper, along with an original Finnish military holster. The pistol had a single-column magazine and looked vaguely like a Luger. It had plastic grips marked “VKT.” Lars chortled when he saw that, and put on a deep radio announcer’s voice: “Yet another fine product from the industrious workers at Valmet.” He explained to Lisbeth that since the end of World War II, Valmet had expanded into a conglomerate, branching out to make everything from log harvesters to military aircraft. Lars had read about Lahti pistols, but he’d never handled one.

Finally, Laine began to inventory the ammunition in detail. In all, there were 1,100 rounds of 7.62x54r for the bolt actions, almost 1,500 rounds of .30 Carbine, 1,280 rounds of 7.52x39 for the Valmet M62, and 650 rounds of 9mm for the Lahti. He was thrilled to find that one of the .30 caliber ammo cans was filled not with ammo but with rolls of pre-1965 silver quarters.

It was not until the next day that Lars had the opportunity to examine the can holding the rolls of silver quarters. When he emptied it out to count the rolls, he found a sealed envelope tucked in alongside the rolls. It was marked “Lars and Andrew” in his father’s handwriting. He opened it and found a typewritten letter. It read:

My Dear Sons:

It was my intention to give you these coins when you’d both graduated from high school, but back then I had my doubts about your maturity, so I decided to hold on to them until after you earned your commissions.

I want you to appreciate these silver quarters for what they really are--not just an investment, and not just a “family heirloom.” They represent REAL money. Pardon the lecture, but you need to judge their value four ways--in 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.