Our family was getting into the minivan at a gas station the other day when I spotted a penny on the ground. I nudged my 8-year old son to turn back and pick it up. He shook his head, “You can’t buy anything with that,” and continued to his seat inside. I glanced over to a fellow pumping gas just across us, likely about 70ish, who had heard my son just as clearly as I, and we both had a chuckle. I then reluctantly agreed aloud, “You know, he’s right, though.”
My grandfather turned 96 this spring. I fondly recall many of his stories about growing up decades ago, roaming the Midwest in search of work in the 1930’s. A factory in Chicago, a local egg route, and as a farm hand in the Dakotas for the wage of a dollar a day.
People expect a dollar to be a store of value. It is to some degree, at least for short to intermediate periods of time, anyway. But long term, what a crap deal holding a buck is. If my grandfather had taken a dollar from a full day’s hard work and stuck it in cookie jar and pulled it back out today, he’d still have a dollar, sure, but what he could buy with it now is a lot less. Back then, it would buy a few loaves of bread, now only about half a loaf (this despite the great advances in agriculture, delivery, and food processing which should drive prices DOWN!)
What a bad deal to work so hard, to prudently save for a rainy day, just to have a lot of that value rot away. That penny my son found too worthless to pick up now was worth a few pieces of gum decades ago.
Government spends more than it takes in, passes laws to make credit too easy, and sets up back-stopped mortgage-buying enterprises, so more money is printed one way or the other. And that feels good to those getting the benefit of the new money, so they can buy more stuff than they could otherwise afford. The economic indicators look perpetually positive, and we feel magically wonderful as a nation since everybody has been “making more.”
But there’s a back side to this gravy train. Food prices are creeping up and savers are earning no interest; no wonder we are scratching our heads. Maybe some of us are starting to realize that value is evaporating from our own pockets. However it’s nothing new in human history: you can’t create value out of thin air; value is just sucked in from somewhere else; in this case, holders of dollars…or pennies…or, in my son’s case, those who have become indifferent to a penny.
By the way, after he refused that small coin, I reached down and put it in my own pocket before getting into the driver’s seat. As I always do, I examined the coin’s date, not as a collector, but because pre-1982 pennies are mostly real copper, so the melt value is about 2 cents – it awards me more than a penny’s worth of pleasure finding those (pre-1964 dimes and quarters have 90 percent silver- so hold onto those, too.)
Somewhat ironically, a few minutes later at a garage sale, my son found a toy he had been really wanting for his stuffed animal collection for the giveaway price of 10 cents. …”Ya know, son, if it’d been a dime we’d found, I could help ya out…”
Steve Spellman
The Missouri Intelligencer 