A follow up from last week's post "A View from the Gold Perspective", the chart below shows the price of consumer goods / services in gold terms since 1800. As I mentioned in my previous post (and can be seen below):
The Great Depression was a deflationary environment as the dollar was backed by gold. Today, rather than deflation in dollar and gold terms, we have a disconnect between the dollar (slight inflation) and gold (massive deflation) in terms of goods / services.
Source: Minn Fed / Measuring Worth
So this means that an ounce of gold today buys about 5x more than it did in 1800? I've wondered how gold coins were useful in the past, since a single one ounce gold coin today would pay a month's rent, it wouldn't be useful for daily transactions.
ReplyDeleterharris