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by tastyfreeze 388 days ago
If only there was some material that didn't degrade over time and is hard to produce. Somebody should invent something like that.
2 comments

It's circular. Sure it's pegged to metal, but won't tell you how much corn or land or homes you can buy with it. What should one oz of gold, hoarded in 2025, be able to buy you in 2050? Many factors will determine that. Theres no such thing as fixed value, unless the definition is self referential.

The only thing to do is turn present day savings in capital, it's the only claim one can have on wealth in the future.

Its value goes up and down, and is as speculative as anything else.
Price does not equal value. One oz today will buy you about the same as 1 oz 100 years ago.
Yes, it'll buy you an oz of gold.

https://www.macrotrends.net/1333/historical-gold-prices-100-...

What does equal value?

Whatever people buy. If you are looking at the dollar value of gold you have to look at what a dollar would buy that year. That is the value. You will find that a similar amount of gold buys the same amount of things throughout time regardless of the dollar price.

Another way to say that is that the dollar price of gold is correlated with the cumulative inflation of the dollar0 over time.

Thats the inflation adjusted curve, meaning it's what gold can buy relative to what a dollar can buy.
In 1900 a 20 dollar coin contained 0.9675 ounces of gold. An ounce of gold was legally defined as $20.67. No free floating gold price. A dollar coin contained 1.672 grams of gold.

1900 $1 is equal to 2025 $172

So a single dollar today will buy 1/172 of what it would in 1900. That is inflation. Not an inflation adjusted curve. Just the drastic devaluation of the dollar.