In increasing numbers, stores across the U.S. – like this Shell gas station in Ashland, Oregon – are accepting 90% junk silver, or silver coins more generally, as payment for goods and services.
Although it isn’t common by any standard, the increasing use of alternative forms of money has been occurring…although there are a number of reasons for exploring alternative currencies, eroding value of the U.S. dollar is the prime motivator.
What exactly are 90% junk silver coins?
Prior to 1965, standard U.S. quarters and dimes contained 90% silver. They’re referred to as “junk” because they have absolutely zero numismatic, a.k.a., collectors’ value. Meaning, they’re only value comes from the silver they contain, nothing else.
Why are merchants and shoppers increasingly interested in coins like these?
Quarters and dimes from this era, unlike ones minted from 1965 onward, contain something of intrinsic value…silver in this case. Simply put, standard currency today doesn’t. Rather, its value is allowed to float against other currencies from around the world. In other words, today’s money doesn’t derive its value from something tangible.
The price of pre-’65 quarters and dimes reflect this. In 1964, one quarter was $0.25. Since standard U.S. currency has went to what some economists refer to as “fiat” – i.e. backed by nothing tangible – that quarter is worth roughly $5 today.
In everyday terms, this means that one quarter from the early ’60s can theoretically purchase approximately $5 worth of goods today.
Yikes!
What happened!
Why is the quarter from 1964 and before worth so much more in today’s money?
Well, we could spend literally all day discussing all of the points but the main reason is “inflation.”
In the most basic sense, inflation can be defined as an expansion of the money supply.
When a currency isn’t backed by anything tangible, it’s much easier to print more to pay the bills. Metals like gold and silver limit the amount of money that can be in circulation at any one time. Under a “fiat” money system, the supply can be limitless, at least theoretically.
Therefore, its value can decline relative to gold, silver, etc, which is reflected in the increasing value of a pre-’64 quarter or dime. It’s not that the quarter is that much more valuable, it simply means the value of the “fiat” currency is less and less.
The effect on a personal level of course is increased cost for everyday necessities like food and energy.
This eroding value of the dollar, which manifests itself in terms of increased cost, is the primary motivation driving the resurgence of commodity-backed currency. Silver coins like the pre-’64 quarters and dimes are one of many options out there.
If “fiat” based currencies continue to decline, stores like the gas station in Oregon will most certainly become more commonplace.
