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The point of this entire website isn't about gold vs equity as an investment, it's about gold vs fiat currency as a superior measurement of value. https://pric

The point of this entire website isn't about gold vs equity as an investment, it's about gold vs fiat currency as a superior measurement of value. https://pricedingold.com/about/ https://pricedingold.com/about/

ajross 10mo ago
As a "measurement of value" they both suck. Gold is (extremely) volatile and currency inflates. Well, you can't do much to correct for the speculation noise in gold. But maybe we can attack from the other side. Maybe we could record prices for various representative products in a giant data set somewhere and calculate and record, I dunno, a "price index" that normalizes the prices to a value that is stable over time. I bet people would pay good money to look at a chart like that. Maybe we could find one.
- rjbwork 10mo ago
  Unfortunately Goodhart's law has rendered official inflation measures borderline useless, as anyone who has been shopping for food for the last decade can tell you.
  - ajross 10mo ago
    Taking your example in good faith: Gold is four times as expensive today as it was at this time in 2015. Has food seen a 4x increase? No, right? So gold is volatile on a level way beyond inflation. QED. Are CPI measurements difficult? Sure. It takes a bunch of expert eggheads and a lot of shouting to come to consensus. Still better than trusting some kind of magical commodity market to tell you.
    - fdr 10mo ago
      You don't even need to trust CPI alone when looking in history, where things have evened out a bit: we have historical short-term bond yield data, even the yield curve: people bidding on short periods with the safest debtor expecting changes in nominal value. Not to suggest CPI is redundant, there's a reason why central bankers read it after all. For one, it's the most timely data they have. But it's impossible to nudge it year after year -- accumulative error -- without it become obviously decoupled from other data, including the long-term bond market data. It just so happens commodities are the wrong yardstick.
    - ekianjo 10mo ago
      > Gold is four times as expensive today as it was at this time in 2015 easy to explain. Gold has a supply constraint. More demand causes prices to rise. When you have a currency following a heavy inflationary trend, people buy Gold, so the price of Gold goes up.
      - ajross 10mo ago
        People buying gold speculatively as an inflation hedge is exactly the opposite of gold being a source of stable value, though. Gold is "inflating" far, far faster than currency (edit to clarify: far faster than currency-valued goods; gold "interpreted as" a currency is deflating catastrophically), you just pointed it out! There are a shocking number of gold-happy nerds on this site who are going to be shocked and horrified the next time it crashes (which is has, and will again). The nonsense the largely-partisan smarter-than-thou media you're watching is feeding you is nonsense, and at some point you're going to discover that via great suffering.
fdr 10mo ago
It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s. I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems. I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them. See https://www.jpmorgan.com/insights/markets-and-economy/markets/is-it-a-golden-era-for-gold https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus/html/ecb.irebox202506_01~f93400a4aa.en.html https://www.ecb.europa.eu/press/other-publications/ire/focus...
- jameslk 10mo ago
  When people talk about inflation, I don't think they're referring to just CPI, but asset inflation too. Things like equities, real estate, gold/silver/platinum, bitcoin, etc. These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.
  - fdr 10mo ago

ajross 10mo ago

As a "measurement of value" they both suck. Gold is (extremely) volatile and currency inflates. Well, you can't do much to correct for the speculation noise in gold. But maybe we can attack from the other side. Maybe we could record prices for various representative products in a giant data set somewhere and calculate and record, I dunno, a "price index" that normalizes the prices to a value that is stable over time. I bet people would pay good money to look at a chart like that. Maybe we could find one.

rjbwork 10mo ago
Unfortunately Goodhart's law has rendered official inflation measures borderline useless, as anyone who has been shopping for food for the last decade can tell you.
- ajross 10mo ago
  Taking your example in good faith: Gold is four times as expensive today as it was at this time in 2015. Has food seen a 4x increase? No, right? So gold is volatile on a level way beyond inflation. QED. Are CPI measurements difficult? Sure. It takes a bunch of expert eggheads and a lot of shouting to come to consensus. Still better than trusting some kind of magical commodity market to tell you.
  - fdr 10mo ago
    You don't even need to trust CPI alone when looking in history, where things have evened out a bit: we have historical short-term bond yield data, even the yield curve: people bidding on short periods with the safest debtor expecting changes in nominal value. Not to suggest CPI is redundant, there's a reason why central bankers read it after all. For one, it's the most timely data they have. But it's impossible to nudge it year after year -- accumulative error -- without it become obviously decoupled from other data, including the long-term bond market data. It just so happens commodities are the wrong yardstick.
  - ekianjo 10mo ago
    > Gold is four times as expensive today as it was at this time in 2015 easy to explain. Gold has a supply constraint. More demand causes prices to rise. When you have a currency following a heavy inflationary trend, people buy Gold, so the price of Gold goes up.
    - ajross 10mo ago
      People buying gold speculatively as an inflation hedge is exactly the opposite of gold being a source of stable value, though. Gold is "inflating" far, far faster than currency (edit to clarify: far faster than currency-valued goods; gold "interpreted as" a currency is deflating catastrophically), you just pointed it out! There are a shocking number of gold-happy nerds on this site who are going to be shocked and horrified the next time it crashes (which is has, and will again). The nonsense the largely-partisan smarter-than-thou media you're watching is feeding you is nonsense, and at some point you're going to discover that via great suffering.

fdr 10mo ago

It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s. I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems. I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them. See https://www.jpmorgan.com/insights/markets-and-economy/markets/is-it-a-golden-era-for-gold https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus/html/ecb.irebox202506_01~f93400a4aa.en.html https://www.ecb.europa.eu/press/other-publications/ire/focus...

jameslk 10mo ago
When people talk about inflation, I don't think they're referring to just CPI, but asset inflation too. Things like equities, real estate, gold/silver/platinum, bitcoin, etc. These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.
- fdr 10mo ago