Friday, Nov 28, 2008
A millenia of cruel inflation
media.economist: Gold price since 1344 in Sterling
Gold at 530pounds, up at its all time high, following an exponential trajectory that began when the last vestiges of the gold standard were removed in the 1970's. We are on a trajectory back to the gold standard, because, a revaluation of gold, to pay off all the debt, is the only way to deal with the debt crisis.
The graph above shows how gold price has risen via a millenium of inflation. Beginning with the clipping of the coignage, such as reducing the amount of gold in the sovereign coin, accelerating with the first Bank of England in the 1600's, culminating in this century's boom following the Federal Reserve and the final capitulation from the ending of the gold window in the 1970's.
Posted by planning4acrash @ 06:44 PM (793 views) Add Comment
13 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. quiet guy said...
"a revaluation of gold, to pay off all the debt, is the only way to deal with the debt crisis."
I thought that the whole point of buying the stuff is that it's price cannot be manipulated, in the long term, by governments.
The article that the illustration comes from can be found here:
http://www.economist.com/research/Backgrounders/displaystory.cfm?story_id=347626
Noe that this article dates back to 1999.
2. Tyke said...
Has p4ac actually put his money where is mouth is and invested in gold?
3. planning4acrash said...
Gold price is currently being manipulated, because it does not account yet for the trillions in the shadow banking system, i.e. derivatives. Most of those must be written off to solve the problem, but some of them will need to be paid for, and that can only occur with a massive revaluation upwards.
It is the overall gold supply that cannot be manipulated. The amount available to the market can be manipulated, as can the paper price via fraudulent derivatives trading and fraudulent fractional reserve gold markets like COMEX, which only have about 14% of the gold they sell.
By the way, the flat line after 1600 is actually inflationary, because this is a logarithmic scale. The scale, lengthened, would show a massive jump in gold price inflation post 1970's once the gold window was closed on the US dollar.
4. sold 2 rent 1 said...
The graph misleading.
Real gold priced in USD fell for 400 years until 1918 and has been rising ever since.
5. planning4acrash said...
Got a betta one?
6. mountain goat said...
2 very different graphs???
7. mountain goat said...
8. mountain goat said...
try again!
9. planning4acrash said...
Your graphs are adjusted for inflation. Mine isn't, so reflects inflation via real gold prices.
You got one that's comparable, that isn't adjusted for inflation?!
10. planning4acrash said...
Your graph shows that gold keeps up with inflation, give or take a bit, my graph shows that inflation has been persistent over the same period. They don't conflict with each other, they reinforce each other and reflect different aspects of the same thing.
Be careful to not bite off more than you can chew, tho, your posts could have been more useful had you stopped to read the graphs.
11. mountain goat said...
P4C "bite off more than you can chew"
take it easy alright, my "try again" was me trying to get an image to appear.
12. sold 2 rent 1 said...
MG,
That's the graph I was looking for.
Gold fell for 400 years during the Spengler autumn just like gold falls in the Kondratieff autumn (18 years).
Now we are in Elliott wave 5 from 1918 and heading for a new era.
13. planning4acrash said...
S2R, gold fell relative to inflation, but grew in nominal terms. The graph was adjusted for inflation.