Trego's Mountain Ear

The US Constitution says:  No state shall coin money, emit bills of credit, or make any thing but gold and silver coin a tender in payment of debts. ~ Art. I, sec. 10, cl. 1.

I think that translated to a gold and silver based economy if a state were to mint its own coins.  I don’t think it ever limited the Federal government to gold and silver – the old phrase ‘not worth a continental’ makes me believe that the US was created on paper money.

That said, the price of gold went up past $3,400 a couple weeks back.  That’s doggone near 100 times the price gold had when I got my first official laboring paycheck after I turned 18.  So it got me thinking. 

I was 18, and making $2.50 per hour.  A 13 week summer job grossed $1,300 – just a little less than the cost of a year’s tuition, fees and dormitory expenses.  Or, to put things on the gold standard, 37 ounces of gold and five silver dollars.

At $3,400 per ounce, that gold is worth $125,800.  At junk silver prices, those five silver dollars amount to $126.  At today’s prices, my summer’s labor was worth $125,926.  Divide that by thirteen 40 hour work weeks – the result is $242.16 per hour, in today’s currency, for the summer of 1968.  Obviously, I was well paid – well, I knew that because other students had work study jobs in the $1.25 range. 

I think that was the year that I found where someone had stolen two cartons of C rations from a fire camp.  I thought it was no foul when I lifted the thief’s stolen C rats, and tossed the boxes into the stuff I took to college that year – figuring that if I really got broke, I’d have a couple dozen meals on hand.  I did get really broke, and opened my stash, and learned that I hadn’t robbed the thief – I opened the carton to find that I had salvaged two cartons of lima beans and ham.  Somewhere on this planet, there is probably someone who likes lima beans and ham.  It is not me.  I was so broke that I ate lima beans and ham, and got a brief job on a jackhammer for a stake to get me back in the dormitory poker games. 

I had no idea how rich I was, until I started looking at 1968 on today’s gold standard.  Think about it – today, a $50,000 pickup is a short 15 ounces of gold – almost, but not quite, 5 weeks labor.  Rich, I tell you, rich and I never realized it.

Still, I need to check these numbers out with the power of compound interest.  I know that a hundred dollars, invested in gold in 1968, would be worth $9714.28 at today’s gold prices.  At 8 percent interest, compounded monthly, my hundred 1968 dollars would be $9,553.57. 

As I contrast the value of gold and the power of compound interest, it looks like there isn’t a whole lot of difference.  Still, I’m one of the lucky ones – my college interest in sociology yielded me a good career (though there were times that a job surveying paid the bills).  In a world where an interest in sociology and a backup ability of seeing the world through a transit can make a good living, the value of gold just isn’t relevant.