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<p>[QUOTE=&quot;NorthKorea, post: 1998749, member: 29643&quot;]BTW, the OP&#039;s argument is flawed in that it&#039;s essentially comparing the relative value of commodities. Three years ago, someone may have made a claim that &quot;a dime would buy a loaf of bread in 1964 and it still buys a loaf of bread (in 2011).&quot; In the last three years, the cost of a loaf of bread is about the same as it was in 2011, maybe slightly lower due to a 20% drop in the component price of wheat, but it now takes three 1964 dimes to buy a loaf of bread. Three years ago, a gallon of gas was $3.40, and today it&#039;s $3.22. Three years ago, silver was twice the price it is today, so the proverbial 1964 quarter would have bought TWO gallons of gasoline... if you pushed back to 3.5 years ago, it would have bought THREE gallons of gasoline.</p><p><br /></p><p>If you assume silver to be the perfect hedge against inflation, you&#039;d think we had 100-200% inflation since 2011.</p><p><br /></p><p>This is why the &quot;basket of goods&quot; approach is used for defining inflation instead of single products/commodities. With food, you can play the &quot;a coin of silver bought X&quot; game all day.</p><p><br /></p><p>For example:</p><p><br /></p><p>In 1913, a silver dime bought a little less than two pounds of bread, a quarter and dime bought a little less than a gallon of milk. In other words: For a dime and a quarter you could buy a gallon of milk or seven pounds of bread.</p><p><br /></p><p>In 2013, a silver dime bought a little less than a pound of bread, and a quarter and a dime bought a little more than a gallon and quart of milk. In other words: For a dime and a quarter, you could buy 1.25 gallons of milk or 3.5 pounds of bread.</p><p><br /></p><p>Again, the validity of the phrase is based upon a snapshot of time. It&#039;s generally flawed outside of that single snapshot. Yes, PMs, over the extremely long run, on average, will keep pace with inflation, but there will always be times when they&#039;re under-/over-priced. They tend, on average to retain value relative to fixed dollars, because we DEFINE them that way.[/QUOTE]</p><p><br /></p>

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