Monday, October 18, 2010

Gold over the LONG Run

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

1 comment:

  1. 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.