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Great Grandpa And The Silver Dollars -or- How The Government Steals You Blind

by NetRanger

…a short fable about value and wealth.

Many years ago there was a man named George Franklin (His friends called him “Frank”) who worked hard for his money. He was a machinist. He was highly skilled and highly sought after and, as such, was fairly well off. He and his wife had adequate savings, a nice home, some land, and several children.

One day, late in his career, he had an idea. Frank’s idea was to take an entire months wages and give it to each of his first two great grandsons. He discussed this with his wife, Tina, and they agreed. Their children were all grown and married with either young children or expecting. It would take a bit of extra saving but nothing the couple couldn’t handle. The house was paid for, the kids were raised, the car was old but seldom used.

Frank was paid a fairly handsome wage of $2 per day ($10 per week, $40 per month). It was high for a machinist but his skill and accomplishments rewarded him. So, over the next year, he and his wife set aside $80 for the two great grandsons.

After they saved the first $40, Frank, while cashing his weekly cheque, withdrew $40 in SILVER DOLLARS and put in a small leather bag that Tina had made especially for the purpose. After they saved the second $40, Frank attempted a similar action. But, a strange thing happened: The bank was out of $1 coins. Since a dollar was a dollar, Frank just had the bank give him 4, $10 bills.

The years went on. Frank and Tina aged. Frank never really retired but rather opened his own shop. I don’t think it ever made much money but it kept him busy. Frank died at the ripe old age of 90 and Tina followed the next year at 93. (Yes! Tina was a couple years old than Frank. SCANDALOUS in those days when they were courting.)

When the will was read there was no heir for the “Great Grandson Money”. They had multiple great grandchildren, ALL GIRLS! But, one of the granddaughters-in-law was pregnant with Twin Boys! The entire family was excited over this since these would likely be the heir to the Great Grandson money. They all imagined it to be a great sum, as the amount was kept secret by the designated Executor of the Franklin’s estate.

The twins were born and a meeting with the Franklin’s Estate Executor was scheduled. To the first great grandson was given the first bag of $40. To the second great grandson, born 4 minutes later, the second bag of $40 was given. As the parents opened the bags to see what was in them, shock and awe proceeded around the room! How could Grandpa Frank have been so unfair! So short sighted! …to give one grandson so much and the next one so little.

Think of it: One grandson got 40oz of silver valued at current prices: $1600, the other grandson, who got 4, $10 bills. Total: $40.

How could this be? Great Grandpa worked just as hard and just as long for each of the bags of money, right? The value should be the same. But it was not. Where did the value go? If he had given his grandsons most anything, Colt Revolvers, Barrels of Oil, Land, etc, etc, they would have been equal. But, with the dollars they are not. Why? Isn’t $40 always $40? No it isn’t.

What happened was the value that Grandpa Frank put in each bag was the same, at the time. But, because the bag with the 4, $10 bills was of an item that had arbitrary value that was set by your government, they debased its value by printing more money. They, in effect, stole the value right out of the bag without ever having to touch it. Ingenious! Evil, dishonest and crooked, but, ingenious nevertheless.

The values of gold, silver, copper and many other things are timeless. While their value may go up or down depending on conditions, their value has a MARKET VALUE that cannot be manipulated by a significant amount for long.

If you have value that you need to keep, you need to put it in hard assets. Those assets, though they can be stolen and they can’t be eaten, will retain most of their value over time.

As preppers, we must think about this. But, also, about balance. Don’t sink all of your available income into just silver or gold or Colt Revolvers. You need Food, Fuel, Cash, Ammo, etc to meet immediate needs. Don’t lock it all up in silver or gold. You may lose value when you are force to trade it in a pinch at a lower price because of your desperation.

4 comments to Great Grandpa And The Silver Dollars -or- How The Government Steals You Blind

  • Tony

    Great story I will send to my brother who is a CPA with a Masters degree in ignoromics!
    Maybe this will wake him up.

  • Son of Liberty

    This is actually the exact pitch I use when talking to well meaning tea party republicrats about economic issues. I carry around a $10 Federal Reserve Note from 1934 and a Walking Liberty Half Dollar from 1937. I point out that in 1937 the FRN was worth 20 times the coin, and now the coin is worth more than the paper just based on its silver content (and the FRN is not a collectible or anything… I got is as $10 change one day from the coin store). If they’re still listening (they usually are) I point out that the coin was issued debt free and with the note the American people have been paying interest on it ever since it was issued. I find that this is a really good way to get conversations moving in the right direction with people who may not have thought about this stuff before.

  • hoser

    GREAT ARTICLE! I’m forwarding it to all my friends. Espicially the “Hard Headed / Type-A personality” ones.

  • Dan

    A piece of paper vs a tangible finite asset with many applications.
    Mix in the element of time and there you have it.

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