4 ms·

In 1944, the USD was pegged to gold at $35/troy oz. The current spot price of gold is $2300/troy oz. 1 troy oz of gold in 1944 = 1 troy oz of gold in 2024. Thi

by scrlk 2y ago

In 1944, the USD was pegged to gold at $35/troy oz. The current spot price of gold is $2300/troy oz. 1 troy oz of gold in 1944 = 1 troy oz of gold in 2024. This gives the price of the Manhattan Project as $131 billion in 2024 dollars.

noxvilleza 2y ago
Not sure if this is that good of a metric given that I've read before that in recent history, precious metals have much higher demand where there is crisis and instability - and 1944 is certainly one of the peaks for that. I guess since 2023 it's also been quite a peak.
- chaostheory 2y ago
  It’s a great metric at the moment for the reasons that you’ve given. We are living in a period of crisis and instability. Just like in that time, we are close to yet another global war. The difference is whether or not nuclear weapons will keep things from further escalating.
  - eru 2y ago
    > We are living in a period of crisis and instability. What? We are living in a golden age of unprecedented peace and prosperity. By and large, people never had it so good.
    - richk449 2y ago
      It was the best of times, it was the worst of times.
    - Dalewyn 2y ago
      The west (and some tag-alongs like Japan) is living in a golden age of unprecedented peace and prosperity. The world at large has other ideas, especially continental Asia and the Middle East where people seemingly can't stop brutally killing each other.
      - eru 2y ago
        Have you had a look at the graph of GDP per capita in eg Bangladesh recently? PR China has also seen enormous advances in prosperity, and hasn't been in a major war in 70 years, either. In India obesity is a bigger problem than starvation. And approximately everyone can afford a smartphone, too. South East Asia is doing fairly well, too, compared to historical averages. Even Sub Saharan Africa is finally starting to catch up. Yes, there are still wars, alas. But by and large people are richer and living more peaceful lives. We could look at statistics, if you wish. (I was looking for a graph of casualties of war over time for my previous comment, but couldn't find one that was recent enough, sorry.) The founding Prime Minister of my own adopted home of Singapore wrote a book called 'From Third World to First'. And he's right.
      - ithkuil 2y ago
        We have to put things in perspective. During the Balkan wars about 5% of Europe's population lived in a country that was at war. Yet that time period was relatively peaceful compared to the first half of the 20th century where Europe went through two total conflicts. Yet for me the war in Yugoslavia was of personal significance and I felt it and its longer term effects closely. But it wouldn't be fair for me to just dismiss that the second half of the 20th century was a time of peace and prosperity in Europe, because a part of it was burning in flames and committing atrocities to who were their brothers 5 minutes before. The precariousness of peace is what makes it so valuable. Yes. There are conflicts all around the world. Wars. Oppression. Injustice. Racism. I don't think that recognizing that we're living unprecedentedly peaceful and just times is going to make those conflicts and injustices worse. Quite the contrary. I feel that never recognizing the successes and progress that humanity has made in many of those fronts is what will eventually doom us to regress.
  - lesuorac 2y ago
    But why is gold a better metric than anything else? Like if there's a global war I bet people are going to want canned food much more than a gold chain. So should we use the price of chicken soup in 1944 vs 2023? --- But yeah I also agree with eru; being "close to yet another global war" is a way better place to be than "actually in a global war". Considering pretty much every century has them.
    - noxvilleza 2y ago
      Precious metals (gold/silver) are very expensive given their weight, relatively easy to divide up, and won't significantly go stale or decompose (some oxidation will occur - sure). I'm sure there are other assets that this is also applicable to - it's just the categorical example I remember discussing with my accounting teacher ~19 years ago.
      - eru 2y ago
        > [...] and won't significantly go stale or decompose (some oxidation will occur - sure) [...] Just to nerd out a bit: You can dissolve gold in some particularly strong acids, but it doesn't really diminish the value of the gold. The effort for getting it back into elemental form is small relative to the price it fetches. Compare this to eg aluminium, or to make an even starker contrast: wood.
        noxvilleza 2y ago
        Yeah I was just comparing it to other things that are very expensive (by weight and size) like, saffron, truffles, caviar, printer ink, etc.
        djtango 2y ago
        Yes - exactly this. Gold is nature's money. Every other asset wishes it was told but it's gold's chemistry that makes it a good store of value for exactly what you said. The relative cost to purify and reshape/melt etc is cheap wrt its value. Cf Platinum which is much harder
- wakawaka28 2y ago
  No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually removed (I think in 1971). Right now there are factors driving the price of gold up, including massive central bank purchases and also massive understated inflation in the West. Everyone knows that fiat currencies are fleeting so the world is preparing for an inevitable decline or collapse of the dollar.
  - csomar 2y ago
    It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future). Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]). 1: https://en.wikipedia.org/wiki/Net_international_investment_position#/media/File:US_Net_International_Investment_Position.png https://en.wikipedia.org/wiki/Net_international_investment_p...
  - SideQuark 2y ago
    It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly. As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed. There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.
    - djtango 2y ago
      Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the important things in life have gone up more than stated inflation. I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato. Meanwhile education, housing and healthcare are the least affordable they've ever been. https://en.m.wikipedia.org/wiki/Baumol_effect https://en.m.wikipedia.org/wiki/Baumol_effect

by scrlk 2y ago

noxvilleza 2y ago

Not sure if this is that good of a metric given that I've read before that in recent history, precious metals have much higher demand where there is crisis and instability - and 1944 is certainly one of the peaks for that. I guess since 2023 it's also been quite a peak.

chaostheory 2y ago
It’s a great metric at the moment for the reasons that you’ve given. We are living in a period of crisis and instability. Just like in that time, we are close to yet another global war. The difference is whether or not nuclear weapons will keep things from further escalating.
- eru 2y ago
  > We are living in a period of crisis and instability. What? We are living in a golden age of unprecedented peace and prosperity. By and large, people never had it so good.
  - richk449 2y ago
    It was the best of times, it was the worst of times.
  - Dalewyn 2y ago
    The west (and some tag-alongs like Japan) is living in a golden age of unprecedented peace and prosperity. The world at large has other ideas, especially continental Asia and the Middle East where people seemingly can't stop brutally killing each other.
    - eru 2y ago
      Have you had a look at the graph of GDP per capita in eg Bangladesh recently? PR China has also seen enormous advances in prosperity, and hasn't been in a major war in 70 years, either. In India obesity is a bigger problem than starvation. And approximately everyone can afford a smartphone, too. South East Asia is doing fairly well, too, compared to historical averages. Even Sub Saharan Africa is finally starting to catch up. Yes, there are still wars, alas. But by and large people are richer and living more peaceful lives. We could look at statistics, if you wish. (I was looking for a graph of casualties of war over time for my previous comment, but couldn't find one that was recent enough, sorry.) The founding Prime Minister of my own adopted home of Singapore wrote a book called 'From Third World to First'. And he's right.
    - ithkuil 2y ago
      We have to put things in perspective. During the Balkan wars about 5% of Europe's population lived in a country that was at war. Yet that time period was relatively peaceful compared to the first half of the 20th century where Europe went through two total conflicts. Yet for me the war in Yugoslavia was of personal significance and I felt it and its longer term effects closely. But it wouldn't be fair for me to just dismiss that the second half of the 20th century was a time of peace and prosperity in Europe, because a part of it was burning in flames and committing atrocities to who were their brothers 5 minutes before. The precariousness of peace is what makes it so valuable. Yes. There are conflicts all around the world. Wars. Oppression. Injustice. Racism. I don't think that recognizing that we're living unprecedentedly peaceful and just times is going to make those conflicts and injustices worse. Quite the contrary. I feel that never recognizing the successes and progress that humanity has made in many of those fronts is what will eventually doom us to regress.
- lesuorac 2y ago
  But why is gold a better metric than anything else? Like if there's a global war I bet people are going to want canned food much more than a gold chain. So should we use the price of chicken soup in 1944 vs 2023? --- But yeah I also agree with eru; being "close to yet another global war" is a way better place to be than "actually in a global war". Considering pretty much every century has them.
  - noxvilleza 2y ago
    Precious metals (gold/silver) are very expensive given their weight, relatively easy to divide up, and won't significantly go stale or decompose (some oxidation will occur - sure). I'm sure there are other assets that this is also applicable to - it's just the categorical example I remember discussing with my accounting teacher ~19 years ago.
    - eru 2y ago
      > [...] and won't significantly go stale or decompose (some oxidation will occur - sure) [...] Just to nerd out a bit: You can dissolve gold in some particularly strong acids, but it doesn't really diminish the value of the gold. The effort for getting it back into elemental form is small relative to the price it fetches. Compare this to eg aluminium, or to make an even starker contrast: wood.
      - noxvilleza 2y ago
        Yeah I was just comparing it to other things that are very expensive (by weight and size) like, saffron, truffles, caviar, printer ink, etc.
      - djtango 2y ago
        Yes - exactly this. Gold is nature's money. Every other asset wishes it was told but it's gold's chemistry that makes it a good store of value for exactly what you said. The relative cost to purify and reshape/melt etc is cheap wrt its value. Cf Platinum which is much harder
wakawaka28 2y ago
No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually removed (I think in 1971). Right now there are factors driving the price of gold up, including massive central bank purchases and also massive understated inflation in the West. Everyone knows that fiat currencies are fleeting so the world is preparing for an inevitable decline or collapse of the dollar.
- csomar 2y ago
  It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future). Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]). 1: https://en.wikipedia.org/wiki/Net_international_investment_position#/media/File:US_Net_International_Investment_Position.png https://en.wikipedia.org/wiki/Net_international_investment_p...
- SideQuark 2y ago
  It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly. As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed. There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.
  - djtango 2y ago
    Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the important things in life have gone up more than stated inflation. I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato. Meanwhile education, housing and healthcare are the least affordable they've ever been. https://en.m.wikipedia.org/wiki/Baumol_effect https://en.m.wikipedia.org/wiki/Baumol_effect