CTD Blogger
Joined:
7/14/2009
Posts:
830
Last Post:
11/20/2009
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Subject:
The gun that beat inflation - How the Colt Peacemaker outshone gold
NEW YORK (MarketWatch) -- There is an old and apocryphal saying that "a
good handgun is worth an ounce of gold" and it turns out to be true --
at least it has for the past 136 years.
Because it is basically unchanged after 136 years of continuous
production and because there is a healthy, liquid market for it, a good
example of this case can be made by tracing the price of "The Gun that
Won the West," the Colt Single-action Army revolver. The venerable
Peacemaker turns out to be a better gauge of inflation than gold is and
a better investment. President Ronald Reagan even named a missile after
it.
The correlation of gold and guns can be traced back at least to 1873
when Colt's Manufacturing Company of Hartford, Conn., introduced the
most technologically advanced handgun of its time, a six-shot revolver
that used metallic cartridges. The Army adopted it as its standard side
arm, a position it held until 1892. The innovation of metallic
cartridges made it easier to reload in a hurry. Reloading had always
been an issue because it was slow, unwieldy and required some
expertise. Now anybody could do it.
In 1873 the Colt SAA sold for $17.50. The complete kit with a holster
and some ammunition could be covered by a $20 gold piece. The $20
Double Eagle of 1873 contained 0.9675 ounces of pure gold. Today an
ounce of gold is about $1,090 and a new Colt SAA can be special ordered
from Colt's custom shop for about $1,500.
As a collector's item the Colt fares even better. A recent check of
Collectorsfirearms.com found scores of listings at a wide variety of
prices from $1,699 at the bottom to $175,000 asked for a Colt "Pinch
Frame" called "the Holy Grail of single action collecting." This gun
carries the serial number 58. So your $20 gold piece spent on this gun
in 1873 would have returned 874900%.
Gold Double Eagle $20 coins from that year can be found on line for
$1500 to $5000 depending on condition about the same price as Colt
SAA's of similar age and condition.
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