[CyrusL]

It's weird that you critiqued his analysis by using gold, which makes no sense for comparison. You might have strong feelings about unbacked paper money, but that doesn't make comparing with gold a sound financial model.

  August 2004:
  
  Orange Juice Concentrate Futures $61
  Google $85/share
  
  Now:
  Orange Juice Concentrate Futures $211
  Google $576/share
  
  211/61 ~= 3.45
  85*4.27 ~= 293.25

[rplnt]

You just can't compare to one currency and say it costs 5 times more. What I tried to say was that USD's value changed over the years. Apparently no one understood and everyone is trying to be funny. Sad.

[jbooth]

What you were saying was wrong, and more importantly invalid. Gold rising in price does not equate to the USD being less valuable, because there are more than 2 things in the world. Bring the Euro and the Yuan into it if you're going to make currency-valuation based arguments.

But even more than that, compare it to stock market indices. We're talking about how the market valued it, not about currency valuations. The whole argument about currency valuations is a silly sideshow.

In conclusion, if nobody understands the brilliance of your argument, it's probably stupid.

[rplnt]

> if nobody understands the brilliance of your argument

What they didn't understand (what I said they didn't understand) was that I tried to determine value of the USD, not compare price of the gold to price to the shares.

Almost everyone pulled out some stupid comparison, trying to be funny. The Ron Paul, Apple and Juice comments looked like they came here from reddit. Only few comments were actually valuable and tried to correct me in a non-condescending way.

Anyway, after some more reading around I came to conclusion that valuing USD by gold is indeed not the right idea. I was somehow convinced that gold is something stable. From what I found, the difference between 2004 and 2012 dollars is inly something above 25%.

[jbooth]

Upvoted for admitting you were wrong about the gold comparison, it's hard to do that on the internet and we could all do it more often.

[eCa]

What you really said though was that the value of gold has changed compared to the dollar. Gold is a usual "safe haven" in times of economic troubles - and you could say that we have had those in the last few years.

Since 2009 gold has tripled in dollar value [1]. That does not mean that the dollar has lost a third of its value.

What your figures show:

--- August 2004: Gold $405 Google $85/share

Now: Gold $1735 Google $576/share --- Is this: Gold: 1735/405 ~= 4.28 GOOG: 576/85 =~ 6.77

GOOG/Gold: 6.77/4.3 = 1.57

Google have given their shareholders a value worth 57% more than gold.

If you instead had kept your $85 in your pocket since 2004, how many dollars would have today?

[1] http://goldprice.org/NewCharts/gold/images/gold_5_year_o_s_u...