Precious Metal Investing

  • January 25, 2024

Lots of people buy precious metals – gold and silver – to retain the value their paper dollars would otherwise be losing by not spending them. The latter being what’s called “inflation” – a sly etymological gyp that implies the things we buy cost more. In fact, the paper dollars buy less – they lose value – so more of them are needed to buy the same thing.

There’s another metal that’s also precious – and also useful, in a way that gold and silver aren’t.

Old metal.

The kind that rolls.

It makes a lot of sense to buy such metal now, for practical as well as financial reasons. There’s a third reason, too. And it’s arguably the most important one.

Old metal is fun!

But let’s begin with the financials. As a case-in-point, consider my ’76 Trans-Am. I have owned this car for about 30 years now, which means I’m an antique now, too. When I bought the TA, it was then just an old car. Not yet old enough to qualify for “antique” plates.

I paid $5,400 for this one-owner, highly optioned TA with just 55,000 miles showing back in ’94.

According to the Consumer Price Index “inflation” calculator, that’s a sum equivalent to $11,615 in today’s devalued dollars.

But the take-home point is there’s next-to-no chance of finding a ’76 Trans-Am today, in the same general condition that mine was in when I bought it (which was solid “number 2” condition, in the lingo of the old car hobby, meaning a car in nearly perfect mechanical and cosmetic condition, with low miles and only a few superficial blemishes, etc.) for that sum.

I keep up with the prices of old cars generally and second-generation (1970-1981) Trans-Ams specifically because I’m kind of obsessed with them – and to buy something comparable to what I bought back in ’94 for $5,400 today, you’d need around $25k-30k.

In other words, I’ve more than doubled my investment in real money-buying terms.

Of course, this is purely academic as there’s no amount of money I’d accept for the Great Pumpkin, which has what the Japanese call wu – something roughly translatable as historicity. That car and I have been through much of life together; a good part of my youth, all of my marriage (now six years in the rearview).

When I sit behind the Formula wheel, it is the same wheel I held in my hands when I was not only 30 years younger, I wasn’t even near 30 yet myself. It takes me back to that time. I know every ding, every “little thing” that is unique to this particular Trans Am. I could – hypothetically – buy another just like it, but it wouldn’t be the same Trans-Am.

That’s wu.

And I’m none the poorer for it.

I might have been a great deal richer for it – if I still had the other ’76 Trans-Am I used to own. That one was special, in a different way. It was a black-and-gold “50th Anniversary” (Pontiac’s, not the Trans-Am’s) TA, with a 455 and a manual four speed transmission. Only a couple hundred of these were made. If I wanted to buy a car like that one today, it’d cost $50k or more. But I could have bought one back in the early ’90s for about the same as what my more ordinary Carousel Red Trans-Am cost.

The broader point is that almost any car that was just an old car back in the ’90s is now precious metal, in both the literal and the figurative sense. Lately, I’ve been looking at VW Beetles from the ’70s, which is what I was driving in the early ’90s, before I began test driving new cars (so as to avoid having to put miles on my Trans-Am). I bought a ’74 Super Beetle in good driving shape back then for $700.

Try pricing a ’74 Super Beetle in good driving condition today.

The value of these cars has gone ballistic over the past yen years, in part because they are now antique cars and because they are, of course, no longer making cars like them anymore – and there are only so many of them left anymore.

But mainly because of what they’re being forced to make now.

Which isn’t TDI-powered VWs that get 50-plus MPG for $22k – or 400-plus horsepower V8 powered Chargers and Challengers.

New cars are increasingly undesirable to a large and growing number of people – an unprecedented thing. In the past, it was the reverse – because new was (generally) more desirable to most people. It’s why used cars were – historically – cheap. Even what are – today – six figure collectible muscle cars that were (not-all-that-long-ago) just used cars, like my ’76 Trans-Am.

But now new cars have “advanced driver assistance technology” – i.e., driver-control technology and other undesirable standard equipment such as cell phone-emulating LCD touchscreen “interfaces” and “connectedness” (i.e., they are capable of keeping track of you and monetizing you). They are less reliable and more expensive.

And then there are the battery powered devices, i.e., the short-range/long wait, high dollar “EVs” they’re trying to force down our throats. They are leashed cars – and many people don’t like being leashed.

That’s for pets – not people.

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Such people are buying used cars now because they prefer them. Not because – in the past – they could not afford a new car. And a growing number of people simply cannot afford a new car, the cost of which now approaches $50,000 on average (and not counting what the insurance mafia charges to “cover” one). This is why the value of used cars – especially old cars – has gone ballistic and is apt to go even more so in the years ahead.

These cars can be kept going for decades, too. Unlike a battery powered device.

It’s for these reasons – plus the fun reason – that investing in precious metals makes a lot of sense right now. And probably for the foreseeable future, too.

. . .

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