Do you recall your parents or grandparents remarking what a dollar
would buy in their day?
When I was born, in 1952, a dollar could buy five gallons of
gasoline at 20 cents per gallon instead of today’s $3.25-plus per
gallon. If you put that gas into a new car in 1952, your vehicle
likely would have cost about $1,700.
You can get such figures from the Bureau of Labor Statistics,
which calculates the Consumer Price Index, a “market basket” of goods
that the typical U.S. household purchases at any given time. That
basket would include such items as fuel, food, apparel,
transportation, medical services, shelter, utilities and so on.
I have a better gauge for hobbyists, the NPI, or “Numismatic Price
Index,” which you can use to assess the value of precious metals.
To figure the NPI, choose a year such as 1878, when the first
Morgan dollar was minted. Figure what that dollar would have purchased
in a market basket then, using the CPI for that year to help assess
current value. Then figure the melt value of the silver as a measure
of inflation and the retail price of an Uncirculated type coin as a
measure of investment.
Visit these nifty sites to do calculations:
➤ “Measuring Worth,” located at www.measuringworth.com, to access the CPI for any
➤ “Coinflation,” located at www.coinflation.com, to calculate melt value
➤ “Coin Values,” located at www.coinvaluesonline.com, to access the retail
price of a type coin
Using the CPI for 1878, the value of a new Morgan dollar then
would equal about $22.50 in purchasing power today. With silver at
$34.80 per ounce (on March 2), a Morgan dollar’s melt value would
equal $26.92. A common Morgan dollar type coin in low Mint State costs
about $50 to $60. Thus, a Morgan silver dollar since inception has
retained more than its consumer value at melt, and its investment
value in Uncirculated condition has doubled the original purchasing power.
You can use the NPI to assess which metal is overvalued or,
conversely, the better hedge against inflation.
Let’s test that utilizing the 1922 CPI, because the Series 1922
$10 gold certificate (Friedberg No. 1173) remains one of our most
beautiful notes, with a golden Roman numeral X, serial number and
emblem on the face and an orange sunburst on the back.
According to the CPI, $10 in 1922 would equal about $128 today. At
the close of market March 1, melt value of an Indian Head gold eagle
was $693.31 and a common Uncirculated type coin on the lower end of
the Mint State range would be worth $1,000 to $1,500.
A typical gold eagle in circulated condition is worth more than
five times its consumer value at melt and its investment value in low
Mint State is almost eight times its consumer value.
A common 1922 Peace dollar would buy $12.80 in today’s market. Its
melt value March 2 was approaching $27 and its type coin value ranging
from $40 to $50 in low Mint State. Thus, its purchasing power at melt
is more than double its original value, and triple in low Mint State.
Now compare the NPI for silver and gold from 1922 to present day.
You can argue that silver should be about $60 per ounce at melt (or
five times its value) according to the “gold standard.” Or you can
claim that gold is a better hedge against inflation, at least for now.
Michael Bugeja, a coin collector since childhood, is a professor
at Iowa State University and also serves as president and Webmaster of
the Ames, Iowa, Coin Club. He is a nationally known author, journalist