July 5, 2011
Our own Dan Goebel presented this at a monthly social meeting and I wanted to share it with anyone who could not attend.
A nickel is worth more than a quarter today! So, how can that be, you say? No way!
Well, it’s true. If you go to the web site www.coinflation.com, you can see that the melt value for a 1946-2011 nickel is 6.6 cents, and the melt value of a 1965-2011 quarter is 5.9 cents. The reason for this is that, starting in 1965, U.S. quarters became nickel-plated copper. Nickel is worth more than copper, and the nickel has more nickel in it even though it is smaller than the quarter.
Prior to 1965, dimes, quarters, half dollars, and dollar coins were made of 90% silver. In fact, the United States dollar was defined as 371.25 gains (about ¾ Oz) of silver by Thomas Jefferson and this value was accepted by Congress through 1964. Thus, 1965 was the year Americans began using a fiat currency. Although the dollar was still tied to gold for foreigners through 1971, it was illegal for Americans to own gold. Only foreigners could turn the funny money in for gold. Americans would be arrested for doing so.
The significance of this 1965 move to funny money should have been deemed treasonous, for Article I Section 8 of the Constitution holds Congress accountable for fixing the Standard of Weights and Measures. The standard that had been in place for over 150 years defined the United States dollar as 371.25 gains of silver. A half dollar was half that amount of silver, a quarter was a fourth, and a dime was a tenth. Although nickel and copper could vary in value, they were only used for small change. It was an honest system of weights and measures.
Another example of this upside-down system created in 1965 is that a 1965-2011 dime has a melt value of 2.3 cents, while a 1909-1982 penny has a value of 2.7 cents. It appears that, prior to 1965, the American people lost sight of the fact that silver was the real money, not paper.
Today a 1916-1964 90% silver quarter has a Melt Value of $7.12. When you divide the value of the silver Quarter by 5.9 cents, which is the value of the nickel-plated quarter, you find that the silver quarter has a melt value of more than 120 times that of the fake quarter. However, 4 fake quarters will still get you a paper dollar, so if you use the fake quarters to buy paper, and the paper to by silver, the difference is only about 28.5 times. What makes this fiat money system even more absurd is that the ratios of paper money to the metals in the coins change from day to day. I guess you could say Congress fell short of their Constitutional duty to provide for a fixed Standard of Weights and Measures!
Dan Goebel,
Libertarian Party of Livingston County