Silver was in all the headlines in 1967 when I first started regularly reading hobby periodicals. I was quickly educated about gold ? at least in a short-hand hobby fashion. It was illegal to own gold bullion at the time thanks to President Franklin D. Roosevelt?s gold recall order of 1933.
Gold coins of the United States were legal to own and were actively traded in 1967, but even at the prices that prevailed then when the metal price was officially fixed by a 1934 law at $35 an ounce, even then, I really didn?t have the money to buy gold coins. Hence my interest in silver.
Silver was where all the action seemed to be. Silver coins were going out of circulation. I was scrambling to acquire as many from circulation as I could to fill out my sets. I made regular trips to the local bank to obtain rolls of dimes, quarters and sometimes halves. I searched these. I kept what I could. The only restraint was what my paper route income would allow.
Halves were usually a fool?s errand, containing only 1965, 1966 and 1967 40-percent silver pieces. The very isolated possibility that a Franklin or a Walker would show up usually meant that I was occupied with the richer possibilities in quarters and dimes ? dimes especially. Mercury dimes were still abundant even if normally restricted to dates from the last 10 years of the series.
As you can see, silver was real to me. I interacted with it daily. Gold was an abstraction. Sure, I knew it was in wedding rings and teeth, but that was about as far as my acquaintanceship went.
I watched the British devalue the pound sterling in late 1967 from $2.80 to $2.40. I watched the president of France, Charles de Gaulle, start a run on the dollar by demanding gold for his U.S. dollar holdings. In the end, it was the franc that caved.
I watched the U.S. eliminate what was called the gold cover. Every Federal Reserve Note needed 25 percent gold backing. That ended in 1968. London started a two-tier gold market, the officially priced bullion and the free-market price, which inched higher.
Inflation was creeping up. Sure, I was quoting the rising prices of Hostess Twinkies, nickel candy bars that became six cents (shocking), soda pop and other things that interested a teenager. Remember Lyndon Johnson?s 10 percent income tax surcharge for 1968 to help cover the deficit and tame inflation? Probably not. Most people remember him telling the nation he would not run again. As a result, the 1969 budget was balanced, but inflation rose to six percent anyway.
Gold seemed to be the answer even if I couldn?t really buy any. By 1970-1971 I took the plunge and bought my first gold coins. They weren?t even U.S. gold coins. They were British gold sovereigns, which contain just a little bit less than a quarter ounce of gold (.2354). They were $7 each. Now they are around $140. I should have kept them. Too bad.
As few gold coins as I had, I was hooked on the topic. The dollar was devalued in 1971 to an official price of $38 an ounce. In those days, currencies were actually measured by gold and not solely in other currencies as they are today. The second devaluation came in 1973, $42.22 an ounce, which is still the official price. The government then decided it wasn?t worth the bother to make official adjustments. The dollar floated against other currencies. That was it. It still does.
It became legal to own gold Dec. 31, 1974. Yes, I am precise. On that last day of the year it was legal the entire day. It was exciting. Times were changing.
Gold went up to $850 in January of 1980 and very nearly got there again in May of this year when it closed at $719.80 May 11. Markets do retrench from time to time. But I am surprised about one thing: There has hardly been a murmur in the hobby since the price of gold bullion fell below $600 an ounce on Sept. 11. Why do you think that is?