Quarter a Gallon Gas

What is a USD or United States Dollar?  The historic definition of a "dollar" is 412.5 grains of standard ( 90% pure ) silver in coin form. The 412.5 grain figure was an average; the coin weighed 416 when minted. When, through wear and tear, its weight fell below 409 grains, it was no longer a dollar, but could be used in trade for a value in proportion to its weight. In general, banks culled out the worn coins and returned them to the mint to be recast. What a simple system!

You can still exchange FRNs for real US silver dollars, at a rate of about 30 FRNs for one ounce of real money silver. Your checks and credit cards actually transfer Federal Reserve Notes  ( FRNs) which have no fixed  redeemable value. 

Most of us paid into the Social Security system or into our retirement accounts in real Dollars but are being given SS checks ( if we are old enough ) or are given distributions from our retirement account in FRNs.

Inflation implies something is costing more. This is  Orwellian 'doublespeak", since it is the FRN getting less valuable , not goods and services inflating in value. Two gallons of gas still can be bought today for less than a quarter of a US (actual silver) Dollar. 

In 1962 I was paying 25 cents a gallon for regular grade gasoline. If today I had a 1962 US quarter I would have enough real money to buy two gallons of gas --- not because the 1962 quarter is old, but because it is real money containing about 6.3 grams of 90% silver. At today's price of silver that quarter is worth about $7.50 ( in todays FRN "dollars"  ) so today you could buy over two gallons of regular grade gasoline if you had a 1962 quarter. Same goes with 1963 and 1964 US quarters ( and older ) which all contained 90% silver. By 1965 the US quarter contained the following:

Outer layers - 75% Copper, 25% Nickel
Center - 100% Copper

Think about what this means. In terms of real actual dollars, gasoline is half as expensive in 2011 as it was in 1964.

Since I know you have access to the internet, I suggest that you watch some of the great videos on www.youtube.com or on the Google  video site that you can find by searching on Federal Reserve or Money and Banking.