Historical gold chart adjusted for "actual" inflation

8 posts / 0 new
Last post
NJrefugee's picture
NJrefugee
Status: Member (Offline)
Joined: Dec 29 2009
Posts: 8
Historical gold chart adjusted for "actual" inflation

Hi all,

I recently watched Crash Course, and am considering various preparations for the likely outcome of inflation/devaluation of the USD.  One thing that struck me when I punched up a historical Gold chart (vs USD) is that the price of Gold looks a lot like the hockey sticks in CC (and any number of .com stocks in 2000).  I'm sure that a lot of this is due to investors pricing in higher inflation numbers than those reported in the CPI, but I'd like to know how much.  Does anybody have a chart that shows the price of Gold adjusted for "actual" USD inflation as discussed in CC?

Thanks.

wolffj's picture
wolffj
Status: Member (Offline)
Joined: Nov 9 2008
Posts: 1
Re: Historical gold chart adjusted for "actual" inflation

This Silver chart also includes an adjusted Gold price for the last 700 years.

Gold Silver

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: Historical gold chart adjusted for "actual" inflation

Wolffj,

 

Welcome to the site. Thanks for posting graph. Is it possible to post the link and/or a larger graph. I am having trouble reading the very fine print

 

thank,

 

Ken

 

admin's picture
admin
Status: Administrator (Offline)
Joined: May 6 2007
Posts: 346
Re: Historical gold chart adjusted for "actual" inflation

The chart seems to come from this site:  http://goldinfo.net/silver600.html ... although it is only relative to 1998 dollars.

macro2682's picture
macro2682
Status: Platinum Member (Offline)
Joined: Sep 3 2009
Posts: 564
Re: Historical gold chart adjusted for "actual" inflation

It looks like the oposite of a bubble... It's almost like a speculative dip.

NJrefugee's picture
NJrefugee
Status: Member (Offline)
Joined: Dec 29 2009
Posts: 8
Re: Historical gold chart adjusted for "actual" inflation

Though well off it's lows, silver looks like a decent buy by pretty much any historical standard.  I know a lot of folks are buying junk silver, which is probably a good idea.  My only concern about that is how to really use them in the SHTF scenario, since they are actual coins with marked value, and also have a lower silver content than non-monetary coins. Gold is looking high (historically) relative to both silver and the USD, though it may still have plenty of room on the upside, especially in a potential time of distress.  What I'm trying to parse out is where gold really is historically versus the USD.  If CM is correct (and I think he is) that the CPI and GDP have been manipulated over the years to the point that they do not reflect reality, then using gold charts against a "constant" USD is potentially very innacurate, since that dollar would be discounted by the same (reduced) inflation number.  In other words, if a 2010 dollar is worth less than we think it is relative to the 1910 dollar, then gold is not as "inflated" as some charts would suggest.

Tserendash's picture
Tserendash
Status: Silver Member (Offline)
Joined: Mar 5 2009
Posts: 178
Re: Historical gold chart adjusted for "actual" inflation

NJrefugee

I think the misnomer "junk silver" comes from coin dealers.  The common date and worn silver coins have no numismatic (coin collector) value.  So they are worth silver content only when the dealer sells.  When a person goes into a coin shop to sell silver coins the dealer is working his buy strategy.  He usually has a box or bucket of "junk silver" hand to use as a ploy as to how worthless the stuff is.  He will then offer less than half the actual silver content for a few silver coins with no numismatic.  When a buyer shows up wanting rolls of coins they are worth scrap value plus.  Other wise he sells for scrap to a refiner.

In reality it is very handy to have silver in fractions of an ounce and alloyed with 10% other metals to make them much more wear resistant.  Pure silver coins would wear out several times faster if carried in pockets and used as money.  In a real monetary crisis things are nothing like they are now.  Most people are broke.  Making change is difficult.  You want to buy $5 worth of something and all you have is a one ounce .999 fine silver coin worth $20.  They can't make change. 

I was in the boon docks in the Philippines once and had spent all my small peso money.  All I had was 500 peso bills which at the time were worth about $20.  I wanted to buy a coke from a vendor and gave him the 500 peso bill.  He looked at me like I was crazy.  He only made $2 - $3 per day, and his entire stock of goods was maybe $50.  So I did not get my coke.

Having old 50, 25, and 10 cent silver coins may be very, very useful when the dollar falls off its cliff to become worthless.  From present value to worthless can be a matter of just a few weeks (or even days) in a currency crisis.  The market will quickly sort out the real value of the coin based on silver content rather than what is stamped on the coin. 

Gold is great for a compact warehouse of wealth you can transport easily.  Trying to buy a coke with an ounce of gold is a deal you can't do.  With an old dime it is a done deal.

While there are millions of old silver coins in existance the actual quantities are vastly less than will be needed for much of any level of active trade.  Our national population was about half what it is today when they circulated, and many of them went to the melting pot over the years.  Their scarcity will only make them more valuable.

NJrefugee's picture
NJrefugee
Status: Member (Offline)
Joined: Dec 29 2009
Posts: 8
Re: Historical gold chart adjusted for "actual" inflation

Thanks.  You make some compelling points.  Being somewhat new at this, I think it would be easy for me to get started with junk silver.  Of course, I would diversify with gold as well.  I'll also be sure to include one more PM in the portfolio -- the cold blue steel of a gun barrel to protect all this wealth...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments