Exponential Gold Price?
Michael…..thanks for sharing all that
jmar8692…….thanks for that analysis, makes sense
bb..gun……………………..you said, "what intrinsic value (utility) does it have besides acting as a
constraint to print in a monetary system or act as a medium of
exchange?"……………..I’m no expert but that’s twice as many reasons as I can think of for holding paper money……….I look at gold as the strongest currency/medium of exchange there is for now.
i have not been around for some time. while i am here i figured i would respond briefly.
historically, using gold as a medium of exchange has never worked out. when gold is minted or traded, prices fluctuate immediately with gold’s scarcity and deflation becomes the overwhelming fear. personally i would rather live in a world where money is plentiful and competition for resources is excessive (inflation), opposed to the scenario where no one has money and production comes to a halt because there are no bidders for economic activity(deflation).
gold as a constraint to printing money, or keeping real prices stable, has also failed. that promise is only as ironclad as the politician/bureaucrat who makes it. suppose our gold stock begins to fluctuate with increasingly diverse trade (maybe foreign countries manipulate the gold market), what politician would would commit themselves to free-market principles over monetary instability. That would simply be unamerican! =) in all seriousness, there are many flaws with the gold standard, but this dillusion is pure fantasy. ironically, the government-hating libertarians who typically advocate for a gold standard and fervently detest the government’s ability to manage great wealth more than any other political group, somehow trust the government/bureaucrats to "do the right thing" with our money supply. ha
i think inflation sucks as much as the next person, but we have to ask ourselves an important question, how does a growing money supply affect real prices? if a construction worker has to supply 1000 hours of labor to purchase a car in 1985 and 2000, then what difference does it make that the car’s sticker price has changed over time (this example clearly excludes technology and competition, but hopefully it drives the point home)? in my mind, it doesn’t matter. real value, or what we produce, is what counts. not a pile of shiny metal.
It is not an exponential function in the beginning, because the gold price was fixed until 1971. However it shows the same hockey stick Chris' showed in the Expontential Growth video. It also makes it very clear that there indeed is an exponential factor. Interestingly the shape of a hockey stick broke in 1982 but continues in 2002.
After assembling this chart, I'm still impressed by it, because it looks so different than all other charts I found so far.