12 ms·

Is this a reasonable metric though? No one was buying books in 1945 with gold.

by standeven 1y ago

koolba 1y ago
If I were selling books in Europe in 1945, I’d much prefer gold to Reichsmarks.
killingtime74 1y ago
It's a better metric than the estimate of the dollar inflation. Gold standard was in use until 1971
jonhohle 1y ago
Gold is considered to have relatively consistent value over time. 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 $670,000). In terms of gold, house prices are up 20%. In terms of dollars, 18000%. A new car still costs around 13oz of gold. Real inflation of fiat is easy to obscure for political reasons. That’s much harder to do with the market value of gold.
- Aurornis 1y ago
  > Gold is considered to have relatively consistent value over time. Not really. It has fluctuated a lot. You can pick starting and ending points a few years apart and come up with very different results relative to actual inflation. > A new car still costs around 13oz of gold. Now take this idea and average it across a large number of different items and you arrive at inflation statistics, which are better than using 1 commodity or 1 purchasable item as a benchmark.
  - thatcat 1y ago
    Using core, required assets actually makes more sense considering recurring purchases tend to change over time.
  - boroboro4 1y ago
    > Now take this idea and average it across a large number of different items and you arrive at inflation statistics If only it was as simple: you will need to introduce weights between different items, and account to the change of those weights too. Also gold isn't just commodity, it's monetary commodity. If you use official inflation dollars you get 1$ 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.
    - kemotep 1y ago
      Median household income in the 1940’s seems to be something like $2,600. Using your inflation figure that is ~$59800 in today’s dollars. 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.
      - b112 1y ago
        [flagged]
        tstrimple 1y ago
        This is what passes for "intellectual contributions" for Hackernews. Notice there is zero dang's preaching about the values of HN to posts like these. He reserves his warnings for things that are popular but also goes against his fascist administration. This site is chock full of outright bigotry but it's acceptable as long as you present it politely.
        b112 1y ago
        Outside of the humour involved, what is your precise complaint? You do realise that, especially in the US, almost everyone is fat, yes? That there is an epidemic of this? And that it is getting worse. As a general rule, many people considered lean today, would be considered fat 100 years ago. This is the joke, and also the truth. And amusingly if you visit these smaller, older houses, you will actually find narrower internal doors, stairs and halls in many of them. Even bedrooms are smaller, and were meant for smaller beds. Thus humorous thought then lends to the idea, is the lair's size and dimensions a contributor to size? We know environment can cause genetic expression, after all. The comment is what you make of it. You've taken offence for some reason. Why?
  - ttoinou 1y ago
    Gold was a standard for a reason
    - rat87 1y ago
      Yeah people like shiny rocks. Luckily we switched to a more stable system after the great depression. Although with this major tarrifs war who knows maybe Trump will decide to really collapse us economy and switch to the gold syatem
  - scythe 1y ago
    >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. 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".
  - tim333 1y ago
    The key word is relatively. Compared to cash or index investing gold has been far more consistent, while cash has devalued loads even after adjusting for the government indexes, and stocks have gone up loads in real terms assuming you did something passive and reinvested dividends. 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.
- cyberax 1y ago
  > In terms of gold, house prices are up 20% Except that the gold price fluctuated by 50% within the last 30 years: https://goldprice.org/gold-price-history.html https://goldprice.org/gold-price-history.html
- deeg 1y ago
  > A new car still costs around 13oz of gold 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.
  - ekianjo 1y ago
    It's all about utility. So it does not really matter how better or worse cars are over time
    - maxerickson 1y ago
      That is a very interesting utility function
      - ekianjo 1y ago
        If you need to go 50 km away from where you live what functions the car has is irrelevant besides getting you there at the end of the day.
        maxerickson 1y ago
        Sure, but modern cars are in fact much, much better at this. 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.
    - ulfw 1y ago
      What is a 'car'? I don't know what a car is. Sorry. Is it a used Ford Bronco for $2000 or a Ferrari Purasongue for $450,000? They have basically the same utility. What is a car?
- kurthr 1y ago
  Naw. Just look at the plots over the last hundred years. Lately, it's become just as financialized at bitcoin or any of the other "stores of value". https://www.5yearcharts.com/historical-gold-price-chart-how-much-is-gold-worth/ https://www.5yearcharts.com/historical-gold-price-chart-how-...
- ajross 1y ago
  > Gold is considered to have relatively consistent value over time. 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.
  - jonhohle 1y ago
    My grocery bill has doubled over roughly the same time period.
    - ajross 1y ago
      "Groceries" likewise make extremely poor metrics for "consistent value". Also "grocery bill" sounds like you're trying to sneak in an argument about inflation, and not value (gold inflates too!). 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).
- rat87 1y ago
  Median home prices have risen. Home prices have gotten out of control due to limits on supply that's one of the main factors of inflation. Cars today are very different then cars back then and come with more features. The dollar is what we use for currency and the measurement of inflation is well defined (even if there can be good faith argument of which inflation works better especially when comparing long term) meanwhile gold is just shiny rocks
- Retric 1y ago
  > A new car still costs around 13oz of gold. 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.
  - jjk166 1y ago
    Houses built in 1945 are still on the market for comparable prices to those built in 2025
    - Retric 1y ago
      Nope land is comparable, subtract that out and you’ll see a huge difference as you literally can’t legally build a house that shitty in most areas. These things were typically ~750 SF and had terrible insulation via single pane windows etc. 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.
- pyuser583 1y ago
  In 1945, private ownership of gold was illegal. Being contraband, its value was pretty static. The ban was only lifted once we adopted fiat currency, and it became not particularly useful for trade.
AtlasBarfed 1y ago
desilvering of coins was in the 1965 coin act. So if they paid in dimes/quarters/ half dollars /dollars, they were paying in silver
hilsdev 1y ago
All cash was convertible to gold at a fixed rate, so more or less they were

Is this a reasonable metric though? No one was buying books in 1945 with gold.

koolba 1y ago

If I were selling books in Europe in 1945, I’d much prefer gold to Reichsmarks.

killingtime74 1y ago

It's a better metric than the estimate of the dollar inflation. Gold standard was in use until 1971

jonhohle 1y ago

Gold is considered to have relatively consistent value over time. 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.

Aurornis 1y ago
> Gold is considered to have relatively consistent value over time. 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.
- thatcat 1y ago
  Using core, required assets actually makes more sense considering recurring purchases tend to change over time.
- boroboro4 1y ago
  > Now take this idea and average it across a large number of different items and you arrive at inflation statistics 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.
  - kemotep 1y ago
    Median household income in the 1940’s seems to be something like $2,600. Using your inflation figure that is ~$59800 in today’s dollars. 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.
    - b112 1y ago
      [flagged]
      - tstrimple 1y ago
        This is what passes for "intellectual contributions" for Hackernews. Notice there is zero dang's preaching about the values of HN to posts like these. He reserves his warnings for things that are popular but also goes against his fascist administration. This site is chock full of outright bigotry but it's acceptable as long as you present it politely.
        b112 1y ago
        Outside of the humour involved, what is your precise complaint? You do realise that, especially in the US, almost everyone is fat, yes? That there is an epidemic of this? And that it is getting worse. As a general rule, many people considered lean today, would be considered fat 100 years ago. This is the joke, and also the truth. And amusingly if you visit these smaller, older houses, you will actually find narrower internal doors, stairs and halls in many of them. Even bedrooms are smaller, and were meant for smaller beds. Thus humorous thought then lends to the idea, is the lair's size and dimensions a contributor to size? We know environment can cause genetic expression, after all. The comment is what you make of it. You've taken offence for some reason. Why?
- ttoinou 1y ago
  Gold was a standard for a reason
  - rat87 1y ago
    Yeah people like shiny rocks. Luckily we switched to a more stable system after the great depression. Although with this major tarrifs war who knows maybe Trump will decide to really collapse us economy and switch to the gold syatem
- scythe 1y ago
  >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. 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".
- tim333 1y ago
  The key word is relatively. Compared to cash or index investing gold has been far more consistent, while cash has devalued loads even after adjusting for the government indexes, and stocks have gone up loads in real terms assuming you did something passive and reinvested dividends. 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.
cyberax 1y ago
> In terms of gold, house prices are up 20% Except that the gold price fluctuated by 50% within the last 30 years: https://goldprice.org/gold-price-history.html https://goldprice.org/gold-price-history.html
deeg 1y ago
> A new car still costs around 13oz of gold 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.
- ekianjo 1y ago
  It's all about utility. So it does not really matter how better or worse cars are over time
  - maxerickson 1y ago
    That is a very interesting utility function
    - ekianjo 1y ago
      If you need to go 50 km away from where you live what functions the car has is irrelevant besides getting you there at the end of the day.
      - maxerickson 1y ago
        Sure, but modern cars are in fact much, much better at this. 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.
  - ulfw 1y ago
    What is a 'car'? I don't know what a car is. Sorry. Is it a used Ford Bronco for $2000 or a Ferrari Purasongue for $450,000? They have basically the same utility. What is a car?
kurthr 1y ago
Naw. Just look at the plots over the last hundred years. Lately, it's become just as financialized at bitcoin or any of the other "stores of value". https://www.5yearcharts.com/historical-gold-price-chart-how-much-is-gold-worth/ https://www.5yearcharts.com/historical-gold-price-chart-how-...
ajross 1y ago
> Gold is considered to have relatively consistent value over time. 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.
- jonhohle 1y ago
  My grocery bill has doubled over roughly the same time period.
  - ajross 1y ago
    "Groceries" likewise make extremely poor metrics for "consistent value". Also "grocery bill" sounds like you're trying to sneak in an argument about inflation, and not value (gold inflates too!). 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).
rat87 1y ago
Median home prices have risen. Home prices have gotten out of control due to limits on supply that's one of the main factors of inflation. Cars today are very different then cars back then and come with more features. The dollar is what we use for currency and the measurement of inflation is well defined (even if there can be good faith argument of which inflation works better especially when comparing long term) meanwhile gold is just shiny rocks
Retric 1y ago
> A new car still costs around 13oz of gold. 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.
- jjk166 1y ago
  Houses built in 1945 are still on the market for comparable prices to those built in 2025
  - Retric 1y ago
    Nope land is comparable, subtract that out and you’ll see a huge difference as you literally can’t legally build a house that shitty in most areas. These things were typically ~750 SF and had terrible insulation via single pane windows etc. 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.
pyuser583 1y ago
In 1945, private ownership of gold was illegal. Being contraband, its value was pretty static. The ban was only lifted once we adopted fiat currency, and it became not particularly useful for trade.

AtlasBarfed 1y ago

desilvering of coins was in the 1965 coin act. So if they paid in dimes/quarters/ half dollars /dollars, they were paying in silver

hilsdev 1y ago

All cash was convertible to gold at a fixed rate, so more or less they were