May 2025 – Week 3 Edition
Don’t Pass On This Special Gold Coin Offer
As promised, I have been poring over values, mintage statistics and sales trends to find another often overlooked coin that I strongly recommend in certain grades for this particular year. And, yes, it is part of our highly successful 20/20 Program. I am referring to the 1896-S $20 Liberty Gold coin, which is an excellent value in MS63 condition. In fact, it’s the same grade currently on display in the National Numismatic Collection at the Smithsonian Institution’s National Museum of American History in Washington, D.C. and we have a very limited quantity for our clients.
Minted at the famed San Francisco Mint, this coin has a combined population in this grade from NGC (Numismatic Guaranty Company) and PCGS (Professional Coin Grading Service), two of the leading coin grading services in the world, of about 3,100 coins.
Call your representative today and ensure that you don’t miss out on this very special gold coin. In April, I made two rare coin recommendations and both of those sold out almost immediately. In fact, I had to reach out to our private vendor networks and offer even more money to secure enough inventory to cover our orders, which also moved up the value of those coins.
Inflation Is Up 25% Since 2020 and 10-Fold Since 1965
The Consumer Price Index (CPI) for April was released Tuesday morning, May 13th, and it came in lower than expected, up just 0.2% for the month, after falling 0.1% in March. The CPI is now up +2.3% for the last 12 months, close to the Fed’s 2% target and showing the smallest 12-month increase since February 2021. The “core” index (less food and energy) rose 2.8% over the past 12 months, as energy prices fell 3.7% during the same period and food prices increased 2.8%.
Today’s headlines don’t tell us that the Consumer Price Index is up 25.1% over the past five years, encompassing the Biden years, or that it is up 922% over the past 60 years, since April of 1965.
That’s the time just before most of the silver was taken out of U.S. circulating coins as a result of the Coinage Act of June 3, 1965, recommended by the late President Lyndon B. Johnson (LBJ). He requested this move due to rising pressure on the then-fixed price of silver ($1.29), causing the hoarding of silver coins, even before silver was removed from them.
Specifically, LBJ asked Congress to authorize him to take silver out of our dimes and quarters and create a 40% silver-clad Kennedy half-dollar. On signing the bill, LBJ warned against any Americans hoarding (that’s “saving” or “collecting” to us) any circulating silver coins, saying:
“If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be, used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.” – LBJ, July 23, 1965.
President Johnson probably knew he was inventing “alternate facts” there, since silver was already in short supply due to “hoarding” by wise investors. Gresham’s Law was already 400 years old then, named after Thomas Gresham, financier to Queens Mary I and Elizabeth I. That law stated, “Bad money drives out good,” meaning people will hoard silver or gold and spend their debased coins first. By 1968, silver was trading at $2.56, before rising to $50 an ounce in 1980.
Inflation was actually slow to rise for most of the time during the Federal Reserve’s first 50 years after it was founded in 1913, even after gold coins were removed from circulation in 1933, in a time of deflation. When the Fed was formed in 1913, the CPI was set at “10” but it had only risen to “30” by 1963, 50 years later, and to 31.6 during the summer of 1965. The latest 2025 reading is 320.8, up over 10-fold, and the dollar is now down 98.9% to gold, at $3,250 vs. $35 per ounce.
Fiat Money Creates Two Long-Term Problems – Deficit Financing and Inflation
The national debt was barely $300 billion in 1965 and now it is nearly $37 trillion, a gain of 117-fold, with $2 trillion in new deficits each fiscal year, so the Treasury needs to float about $500 billion in new bonds each quarter. That is more than the entire national debt of 1965. For this year, the Treasury announced a huge increase in second-quarter financing needs due to a shortage of cash. On April 28, the Treasury announced a quadrupling of financing needs this quarter.
- In the first quarter of 2025, the Treasury borrowed $369 billion – clearly not enough!
- In the second quarter, the Treasury expects to borrow $514 billion, which is $391 billion more than it announced in February, primarily due to low start-of-quarter cash balances.
- In the third quarter of 2025, the Treasury currently expects to borrow $554 billion.
That’s $1.437 trillion in new debt in nine months, close to a $2 trillion annual rate. What if major investors balk at buying these bonds? That would result in higher interest rates to attract new buyers, pushing interest on the debt higher and ballooning the overall federal deficits.
Examples of Inflation Rising over 10-Fold since the Great Silver Robbery of 1965
The other problem from fiat money creation and deficits is chronic long-term inflation. A few weeks ago, I brought you some statistics about inflation since the end of the gold standard in 1971. Here are some other notable price increases since LBJ’s great silver robbery of 1965:
- The median single-family home in 1965 cost $20,200 but the median home sale in 2024 was $420,800, a rise of 1,983%, or twice the rise of the Consumer Price Index since then.
- In 1965, the per capita U.S. spending on health care was $275 (and 7.2% of GDP) but the per capita spending on health care is now $15,300 (and 20% of GDP), up 55-fold.
- In 1965, the tuition at Harvard was $1,760 per year. This year, annual Harvard tuition is $59,320, up 3,270%, and nearly $100,000 if you include room, board and all fees.
- Gasoline was 31 cents per gallon in 1965 and averages $3.18 now – matching the CPI gain.
- The gold standard still works: The Swiss kept gold backing to their Swiss franc until 2000, and it is up fivefold to the dollar since 1971, when our gold standard ended.
Even though the Consumer Price Index is well-behaved so far this year, we will see more high inflation in the future due to Modern Monetary Theory (MMT), which theorizes that the U.S. government can over-spend indefinitely and run up high debts, if only they can print more money and issue more bonds in their sovereign currency to pay off those debts. This process of “monetizing the debt” guarantees future high inflation, the fruits of abandoning gold and silver.
The time to invest in gold and silver bullion and rare coins is when the world forgets these eternal financial truths, including “Gresham’s Law” that bad money (fiat money) drives good money into hiding (hoarding) by far-sighted investors who recognize quality (real) money.
I encourage everyone who is interested in protecting their investments to call our professional representatives today to discuss options on buying gold, silver and rare coins as an insurance policy, of sorts, to hedge against inflation and poor financial decisions by government bureaucrats. Remember, over the long haul, select rare gold coins have typically outperformed gold and silver bullion. Ask a representative for our new free Gold Guide that expands on this important market aspect.
Gold dropped below $3,300 as the China/U.S. trade talks were seemingly resolved over the weekend and several other tariffs were lowered, ending the brief tariff wars announced on “Liberation Day,” April 2. Stocks soared on Monday, May 3rd, as gold corrected but gold still commands the high ground for 2025. So far, in 2025, GOLD is up 23.5% and SILVER is up 14%, while stocks remain flat for the year.