Observations from my New Hobby of Metal Detecting
I recently bought a metal detector so that my 7-year-old son and I could do a little treasure hunting. It's a lot of fun to turn up the soil and find a coin, even if it's just a recent vintage penny or dime. Our best finds so far are a 1944 silver quarter, a Sacajawea dollar, several wheat pennies and a silver fireman's pendant (worth about $50).
Moving on to a different topic, I had a few thoughts on inflation based on my metal detecting experiences. Over the years, the government keeps degrading the metals composition of coins. Many people are aware that dimes and quarters were 90% silver until 1965, when their silver content went to zero. Pennies were mostly copper until about 1983, when they started using a lot of zinc. How many of you know that quarters, dimes and even fiddy-cent pieces have been 75% copper for many years?
When I dug up the 1944 silver quarter, it was clean and looked exactly like it probably did the day it was lost decades ago. That is in stark contrast to the many newer quarters I've found. They are corroded and the thin outer layer of silver-colored metals has often been eaten through, exposing a deep red copper. I soaked some of these coins in vinegar, which is a mild acid and it basically turned them into all-copper coins. The same was true of a 1971 Kennedy half dollar we found. The worst is recent zinc pennies -- many of them are nearly unrecognizable as coins, as they are so badly corroded.
I find this degradation of coins to the point where they become "biodegradable" somehow sad. It also reminds me of how, throughout history, kings and emperors have inflated their money by issuing coins with progressively lower gold and silver content. I haven't yet found a gold coin while metal detecting, and probably never will, but I've read that metal detectorists in Europe have found gold coins hundreds of years old that are not the least bit corroded. Gold is inert, meaning that it doesn't react chemically with anything. That's what makes it ideally suited to the "store of value" condition in the economic definition of money.
If I told you that you will be put in a time machine that will transport you 200 years into the future and that you could take with you $1 million in Federal Reserve paper notes, or 300 ounces of gold (worth less than $400,000 today), which would you choose?