Thomas Tooke

What was the price of a Calf in Silver in 1870?

In Commodities on May 3, 2012 at 2:11 am

I came across a publication called “The Writer´s Guide to Everyday Life in the 1800s”.

From that I found that the price of a calf in 1870 was around 2.5 USD. The price of Gold was officially at 19.39 USD per ounce but there were records of transaction of Gold with Great Britain during the civil war at 16 USD per ounce. With a ratio of 16 to 1, that give between 1.21 to 1 USD per ounce of Silver. At 2.5 USD a calf is worth between 2.06 and 2.5 ounces of Silver. Since 200 before Christ one needed 3/4 of an ounce of Silver for 1 calf, it seems that Silver lost about 66% of its purchasing power against the Calf in about 2070 years, or a rate of inflation of 0,05% a year. It is not a typo, you read correctly, 0.05% per year.

What can we conclude from that? Not much, except that exponential function does not occur easily in the real world, that is there is no way to expand the supply of precious metals very easily. Commodity money is finite as is the physical world, infinite only exist in the human mind.

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