the silver price for gas
May 23rd, 2008 by 
bkmarcus
Last year, I wrote,
… a great piece of silver trivia I’d never heard before:
In 1964, 3 silver dimes could buy you a gallon of gas (about 27¢/gallon); At the current rate of silver, the metal value of 3 silver dimes would be about $3, just enough for a gallon of gas.
I checked the math. Silver was $1.29/ounce in 1964, according to Kitco.com. Today’s spot price is $12.93, again, according to Kitco. According to 1960sFlashback.com, gasoline was 30¢/gallon in 1964. And according to MSN, a gallon of gas in Charlottesville today ranges from $2.27 to $2.59/gallon.
So if anything, gasoline has gotten cheaper. At least by the silver standard. By the gold standard ($35.10/ounce in 1964 versus $650/ounce today), we should expect a gallon of gasoline to cost $5.55 in present dollars, so by gold-standard prices, gasoline prices have fallen significantly.…
Today’s spot price for silver is $18.20. That would put a gallon of gas at $4.23.
In Charlottesville, gas prices range from $3.71 to $3.92 per gallon.
Just thought I’d offer an update. You can read the rest of last year’s post for some background on the nature and history of money, inflation, coinage, etc.
Update: The “Silver Is Money” blog provides this handy chart:
Posted in economics, history, metablog | 
13 Comments »
Cory said,
Now just compare that rate of inflation to the rate of pay increases and average incomes.
:( everybody’s broke.
Eric L said,
Coins are for nerds!
Adam said,
Out here in soCal, I just paid 4.05 at a “cheap” station. it’s at least 4.23 in Hollywood and downtown.
Jeff Molby said,
Does anybody know where I can find a thorough analysis of the relationship between the dollar prices of precious metals and other commodities?
I’d like to be sure that trivia like this isn’t anomalous before I put too much stock in it.
Oil Price, in US$, Euro, and Gold « Silver is Money said,
[...] And yes, it’s also true if we measure it in silver, gas price has actually became cheaper: http://bkmarcus.com/blog/2008/05/the-silver-price-for-gas. [...]
Ryan McKenna said,
I realize the context in which you are speaking is the relationship of dollars/barrel versus euros/barrel and that particular reflection on national/regional economies. I still feel that the nature of the present “fractional reserve” system in place negates the relevance of any precious metal system.
Ben said,
Ive seen the same thing with gold. Both seem to go up at the same rate.
Philip Brewer said,
I’ve seen a similar analysis for an ounce of gold being enough wealth to buy a man’s suit. That’s generally been true right along (helped by the fact that you could buy a cheap man’s suit a few years back for $300 or so when gold was down, or a rather nice suit a few weeks ago for $1000).
It’s not too surprising that the value of extracted natural resources (gold, silver, oil) pretty much track together.
mike said,
um no, the national average as of May 27 is 3.83$$ Oil company profits have increased drastically, Exxon-mobil alone has seen an increase in profits of 300% since 2002. Gas doesn’t seem to be getting “cheaper” as you claim.
Harish Mehta said,
In 1964, the year graduated. Gas in Missuori was 14 Cents a gallon and for drycleaning my shirt was also costing me 14 Cents. While new shirt was costing US $ 3
Uncle B said,
The phenomenon you have illustrated here, also reveals how the U.S. government pays its debts and screws savers out of their money! The government has borrowed a huge amount of money to wage war in Iraq. They have papers for a $650 billion debt, made when a man earns $10.00 hr. It looks like it would take a lot of hours to pay off that debt doesn’t it, but looks are deceiving. If the government lets inflation run rampant, and devalues the dollar by half, a man will get $40.00 and hour but he still only has to pay off $650 billion – he has twice as much to pay with, right? Now, if the amount of the debt goes down slightly each year, and the real rate of inflation goes up significantly each year, twenty years from now, the man will owe less, and be paying it off at probably over $300.00 an hour – a lot better! This is great if you are a government, but for a citizen, trying to save for old age, it means that the money you put away today will have very little purchasing power by the time you need to spend it. There are proven records where even high interest accounts do not keep the purchasing power of money invessted on par with inflation – we are all getting screwed so that the government can continue its war mongering spendthrift ways, and since the government is the ‘Decider’ they opt for inflation and rob the savers every time!
Colorblind Justice said,
I’d rather have one Real Silver coin in my pocket than two pockets stuffed with fake currency that imply a message of “In the Illuminati We Trust”!
Robert Donnelly said,
The actual price of gasoline relative to the cost of 3 silver dimes, or any other precious metal, is probably irrelevant. What really matters is the intent of the owners of the oil companies.
Wow, gasoline prices are over $3 an gallon again! I read someone’s blog commenting on the 9/10 cent that is still always posted as part of the prices. While I do not think it is meant to insinuate that people are stupid (I think the real reason is that the gas pumps would need to be changed and the costs to do that are huge.) I think that the issue makes people think that this is the case. I think the real issue is, and let me put this as an example of how people think, that we can save money by buying gas at one station over another. Price is no longer a real issue.
Assuming a 10-gallon purchase, a price difference of 2 cents will give you a whopping 20 cent savings. I don’t think I would go out of my way for this. How about a 5 cents difference! You will save 50 cents. Oh yeah, you might save 7 cents if you go to an ARCO station. Of course you have to factor in the 45-cent debit price that saves ARCO money and you pay for it, should you use your debit card.
So, whether you buy gas at one station or another may be a moot point. Chevron that advertises that they have the best gas (Whether they do or not.) charges a premium for their gas. How about offering the best gas at the price of a regular gas! That kind of marketing might increase market share and drive prices down. Chevron wouldn’t want to do that. It might cut into the bottom line.
Of course Exxon has defined the word rape. They know that we really only purchase the gas because it is convenient and we will go to the nearest station. A few cents difference will not change our habits and we will look the other way at their huge profits. This is real bottom line thinking. I know, I also did it.