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Observations from my New Hobby of Metal Detecting



September 29, 2010 – Comments (8)

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?

8 Comments – Post Your Own

#1) On September 29, 2010 at 1:22 PM, lemoneater (58.46) wrote:

Gardening can also turn up shiny metal objects. I once found a silver spoon. I guess it made up for the fact I wasn't born with one. :) What fun!

Gold does last better than paper, but if I could guarantee their survival, I think I would rather take flower bulbs and rare heirloom plant seeds to the future. Beautiful flowers and delicious vegetables should be in demand in any era.

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#2) On September 29, 2010 at 2:35 PM, RVAspeculator (28.12) wrote:

Stats... There was actually a Twilight Zone about this back in the day.

This guy stole a bunch of gold and went to the future.

HA.  It is actually on Youtube.  Check it out, here is the end...

Fast forward to 3:00


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#3) On September 29, 2010 at 3:25 PM, PaxtorReborn (28.93) wrote:

Aha, but the federal reserve notes might have collector value.  A-ha!

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#4) On September 29, 2010 at 4:14 PM, whereaminow (< 20) wrote:

Thanks for sharing this story!   Father-son bonding, treasure hunting, and a sprinkle of monetary policy.  Throw in a chat about the best centerfielders in baseball history, and you've got a perfect day!

David in Qatar

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#5) On September 29, 2010 at 6:47 PM, MegaMicrocap (< 20) wrote:

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?

Duh, 300 oz gold.  And I'm a gold bear (or in the popular strawman argument, a paper bug).

I would take 1 share of BRK-A over either.  (Assuming any dividends, splits, etc. would be honored on my arrival in the future.  My impression is that securities law is not very clear on time travel.)

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#6) On September 29, 2010 at 10:49 PM, BillyTG (28.94) wrote:

If you could time-warp me FIVE years into the future, I would still choose the gold over the dollars.

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#7) On September 30, 2010 at 1:49 AM, chimpcontest (< 20) wrote:

Although I knew most of what you said (because I collected coins as a kid), I still found this fascinating to think about.  I'm also looking forward to 200 years in the future when apes rule the world... or was that 20,000 years in the future?

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#8) On October 05, 2010 at 11:08 AM, DiceMagic (< 20) wrote:

This is not an entirely new phenomenon, Henry VIII of old England (the one with six wives) ran into trouble with the same issue. Until Henry's reign, English currency was made of valuable metals - gold and silver. To pay for his wars (he had a novel and immediate method of handling the alimony issue), Henry mixed silver in his coins with base metal (copper). The coins became so debased that they contained more copper than silver. Henry's subjects called him "Old Coppernose" as the copper in the coins tended to show through on the high surfaces i.e. his nose on the heads side of the coin. The debasement of the coinage caused rampant inflation, as people demanded proportionally more of the impure coins for payment of goods and services. The price of imports increased, as foreigners would not accept debased currency. Does any of this sound familiar? In the 15th century it only took a few years for the populace to reject the debased currency, we seem to have been a bit slow off the mark, but looking at today’s gold price we seem to be (finally) cottoning on.

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