$450 when corrected for inflation.
Median home price in 1940 Boston area was $3,600 or 180oz gold. Today the median home price is 215oz of gold in the same area (or $670,000). In terms of gold, house prices are up 20%. In terms of dollars, 18000%.
A new car still costs around 13oz of gold.
Real inflation of fiat is easy to obscure for political reasons. That’s much harder to do with the market value of gold.
Not really. It has fluctuated a lot. You can pick starting and ending points a few years apart and come up with very different results relative to actual inflation.
> A new car still costs around 13oz of gold.
Now take this idea and average it across a large number of different items and you arrive at inflation statistics, which are better than using 1 commodity or 1 purchasable item as a benchmark.
If only it was as simple: you will need to introduce weights between different items, and account to the change of those weights too. Also gold isn't just commodity, it's monetary commodity.
If you use official inflation dollars you get 1$ 1940 ~= 23$ 2025. You can see how magnitude wrong it is for housing or cars in the example above.
Here's food prices from 1940 diner: > A 25-cent platter, 5-cent hotdog, and 10-cent hamburger. Also doesn't really work with official inflation dollars either. And again works much better with gold prices.
2024 there seems to be an estimated ~$75,000 median household income.
Housing and cars are also apples and oranges seeing that the average family size and sq footage for even 50’s homes is completely different than today. Today fewer people are living in significantly larger spaces than was normal back then.
For houses I think I expect to get better product for same “real” dollars, like with cars or TV. But given somewhat limited supply of houses this can be wrong assumption.
As for income tbh I read it more like real income fell a lot, rather than a proof that inflated dollars reflect reality well. I.e i think if income inequality didn’t grow as much as it did 2024 median household income would have been much higher which would have increased different between inflation figure from real one further.
I think he's talking about really long periods of time. It's true that gold is an extremely volatile investment, whose price can seemingly quadruple or be cut in four at any time. But if you look over periods where the price of gold increased by more than 20x, this becomes a lot less important when you try to estimate things like the average rate of inflation. If you work with a ten-year moving average of the price of gold the problem is also reduced. Gold is the only metal whose sulfide is unstable under standard conditions (101.3/293.15).
In other fields, this is called a "low-pass filter".
The reason it's been fairly constant is that over the long term the cost is driven by the cost of mining it and costs of say getting an acre of land, digging up earth and processing it remains somewhat comparable to the cost of getting an acre of land and building a house.
Cash depreciates because voters say we need more wages and it's easier for governments to print money than make everyone richer in real terms. They can try to generate the illusion of richer in real terms by fiddling the inflation stats, say focusing on a basket of vegetables and not medical costs or beachfront property,
Stocks go up because companies make profits and reinvest.
Except that the gold price fluctuated by 50% within the last 30 years: https://goldprice.org/gold-price-history.html
But a new car today is vastly different from a 1940s car, so different that it's nonsensical to use it to compare purchasing power of gold.
New cars aren't necessarily a lot better than cars built 20 years ago, but compared to anything built before EFI they are vastly more reliable. And then you could also talk about radial tires if you are comparing to the 1940s.
While you are fiddling with your carb and fixing 2 flat tires, I'm cruising along with a misfiring cylinder and a nail causing a slow leak.
They have basically the same utility. What is a car?
https://www.5yearcharts.com/historical-gold-price-chart-how-...
Uh... Gold has doubled in the last two years. Fast forward past the trade war and it'll likely crash again. Gold is far, far more volatile than currencies. More even than securities, and frankly even most commodities are more stable.
Also, too, no it hasn't, not remotely. Don't hyperbolize, it cheapens the discourse. Food CPI is about 1-2% higher than general CPI right now. (Or maybe you moved from CDMX to San Jose or something, likewise not a statement about value).
A car or house built in 2025 is very different object than one built in 1945.
Consistent commodities like coal, rice, or silver make better points of comparison, but each give wildly different values for inflation just as gold does. Inflation doesn’t mean anything specific on very long timescales because the underlying economy fundamentally changes.
There’s really nothing suggesting gold is a more fundamental measure of value than silver which was far more commonly traded. IMO the reason people focus on gold today is its more consistent use in video games as a currency rather than say platinum. There’s just never been enough gold to use as a common medium of exchange between individuals, but in virtual worlds that’s a non issue.
Survivorship bias means most of the lowest quality housing stock either didn’t survive or was significantly upgraded, but that’s irrelevant when talking about what was being built.
The ban was only lifted once we adopted fiat currency, and it became not particularly useful for trade.
So if they paid in dimes/quarters/ half dollars /dollars, they were paying in silver
Depending on which city they sleep in, Bezos or Musk make all local citizens multimillionaires. Per capita. Statistically.