Gold Arithmetic

[DoChenRollingBearing]

...

Here is some speculative and exploratory work to get an idea of a "good future price for physical gold". All very approximate, and I am not sure how worthwhile all of this is, but here you go.

In particular, do FOFOA's numbers make any sense?

"Gold Arithmetic"

http://tinyurl.com/ba7um78

 

[benjamen]

Expressing a true value for any hard asset using any fiat currency is not useful. Even if you could pin down a good price in dollars, it will rapidly change. $50,000 an ounce or $10,000,000 an ounce, it only depends on how many more dollars the federal reserve has spewed forth. Being able to sell an ounce of gold for 80 million dollars isn't much use if it costs me 10 million dollars to feed my family that day.

I am a fan of historical and current comparisons between hard assets. How many months of food for an ounce of gold? How many days of labor for an ounce of good? Barrels of oil? Acres of productive land?

 

[pmbug]

Yeah, you have to choose carefully your measuring stick. That said, did you see the chart posted here?

http://www.pmbug.com/forum/f2/gold-price-vs-40%-backing-dollar-2272/

 

[benjamen]

Personally, I like measuring the price of things in term of gold like this guy does:
http://pricedingold.com/

For an fun experiment, once a month figure out how many hours of your wages it would take to purchase a single ounce of gold at that month's current gold price. This may be an eyeopener for some if your purchasing power is declining despite raises.
:wave: