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“Real price of gold” is an interesting concept, probably showing a statistical quirk of backtracing CPI than anything useful though? I’d have to study how it wa
by zaroth 5y ago
“Real price of gold” is an interesting concept, probably showing a statistical quirk of backtracing CPI than anything useful though? I’d have to study how it was calculated.
Yes, your graph at the end showing SPY in gold falling below the 200 day MA is exactly what I was talking about.
I absolutely agree gold is volatile in the short term and not some magical replacement for fiat currency nor an absolute indicator of the level of inflation in an economy.
Sometimes however it’s important to figure out if the “platform” you’re taking your measurement from isn’t actually what’s moving, rather than the thing you’re trying to measure. If you’re going to step outside of the fiat viewpoint, gold is where I’d usually start.
Maybe a VIX-adjusted price of gold or something like that could be useful to smooth it out.
- mpalczewski 5y ago> “Real price of gold” is an interesting concept, probably showing a statistical quirk of backtracing CPI than anything useful though? I’d have to study how it was calculated. I agree it's interesting. I'm invested in Gold, so I'm basically betting that it's going to go up. Instinctively, I'm looking for the best disconfirming evidence. Here's where I got the chart. http://scottgrannis.blogspot.com/2022/03/inflation-net-worth-and-federal-debt.html http://scottgrannis.blogspot.com/2022/03/inflation-net-worth... > If you’re going to step outside of the fiat viewpoint, gold is where I’d usually start. > Maybe a VIX-adjusted price of gold or something like that could be useful to smooth it out. yeah, I'm not really sure what the best way to look at it is. I believe Adam Smith used minimum price of labor, but that's distorted as a signal by minimum wage laws. I find the big mac index to be useful-ish. idk, perhaps something like median cost of an hour of labor per big mac, is a measure of prosperity.