Cash for Clunkers? Forgetaboutit! - Bill Huff
The Mercedes Benz Two or More for the Price of One Sale
What would you say if I told you that all Mercedes dealers were running a sale this week – and you could buy 4 Flagship Mercedes vehicles for the price of 1? Would you go down and buy a dozen to stash in your warehouse? Don’t worry! There’s no rush. By this time next year you may be able to buy 5 or 6 for the price of one – in terms of lawful versus fraudulent fake fiat dollars – our most Toxic Paper.
I have been doing some of my own calculations to gauge the carnage as real wealth is being sucked out of our economy. The crude method I use is to find out the price in silver for a particular item in a given year and compare it to the price in silver according to current spot price as well as the current market price of “junk silver” – the 90% silver US coins that are still extremely popular as a hedge against rampant government monetary crimes. I am not an economist. I just want to understand what is really happening in the world of economics. You can invent your own ways to calculate. The results will be confirmed again and again. You can still buy bags of these silver US coins all over the world where people know paper money will always decline in purchasing power to Nothing – its intrinsic value. Take a look.
Here is a more complex calculator. Notice is makes no mention of lawful money. Also notice it posits that George Washington’s salary was worth more than Obama’s in terms of GDP. As far as I have been able to determine Washington was a little more frugal with other people’s money. Of course he had to maintain accounts in tangible assets. This government is no longer hindered by such archaic limitations.
By 1980 silver was hovering around 6.5 FRNs [Federal Reserve Notes - Commonly but Erroneously called “Dollars”] per Troy Ounce. Today’s spot price is around 18.50 FRNs. Check the spot prices here.
I was wondering how many Mercedes Benz’s you could have bought with that 1980 silver if you had decided that 2009 would be the year you enjoyed your delayed gratification. The 1985 500 SEL had an MSRP of $51,200. And that was One Fine Sled in its day. The encouraging news is that you get even more Benz for your Silver Buck today than in 1985 when you had the good sense to stash a little. Now if you could only remember where you put it…
To look at it another way, for 30,000 1965 Silver Dollars containing 371.25 grains of fine silver, you can buy a 2010 McLaren SLR Mercedes Benz and still have a pocket full of FRNs left over. Does that give you some idea of how your congress critters can afford all of their nice perks; cars, jets, Wars? If you need more than one vehicle you might just spend your 30,000 lawful dollars on four [that’s “4”] S-550 Mercedes Sedans – and still pocket some nice change [you may still want to keep your change in silver]. Take the afternoon off and go to a Mercedes dealership. Sit in one of the vehicles that you could easily afford in a lawful free-market economy. Get a feel and smell for how much you are paying for government corruption. Follow the money trail! Cash for Clunkers!? Not for our Philosopher Kings.
Let’s say you want to be extremely frugal and drive an old Volvo or something like that. I took a little internet cruise on Craigslist, Miami [didn’t want the salt damaged cars from New England] and found a whole page full of Volvos for under 3000 FRNs. On average I would say you could get 3 or 4 years of really good service from one of those if you chose wisely. The cost per Volvo would be about 240 lawful dollars. For 30,000 silver dollars you could buy a fleet of 125 or go to a Volvo dealer and buy 10 New Volvo XC-90 SUVs with the new gyroscopic anti-roll technology. I think Henry Ford’s target price was 4 month’s wages for a Model T Ford. The Model was introduced as a price of $850 and decreased in price to as low as $290. Amazing!
Some time ago I came across Moore’s Law which I found quite interesting. It predicted the exponential increase in the number of transistors that could be fit into a given integrated circuit. This being the engine of computing power, Moore predicted that it would double every two years. As it happened he was very close – and the trend continues. Of course it means computers continue to get cheaper and cheaper in relation to their computing power. I thought perhaps that these trends might be at least partially true of other products and processes. Why wouldn’t almost everything be getting cheaper in adjusted dollars – at least every type of product that is heavily impacted by computers – or uses computers as components – or robotic manufacturing? Think about the economy of scale involved when a farmer uses a modern piece of computerized equipment that can plow or harvest many square miles instead of a few acres. Do you remember when cell phones used to cost $3500.00? Now they are disposable. Thank a robot!
Silver has a spot price today of 18.50 FRNs per Troy ounce. Using round numbers I calculated that a Flagship Mercedes might have cost about $30,000 in 1964 when we still had 90% silver in our pockets. Today, 30,000 90% Silver Dollars would be worth something like 400,000 FRNs.
Copyright © 2009 Bill Huff