Supply is mostly stable. Demand changes based on fear (ie inflation). In the late 70's inflation was a national concern, which decreased as interest rates skyrocketed as the Fed shrank the money supply.
LOL. Gold never changes its value, it is fiat currency that we use to express gold's value that swings drastically. As fiat currencies are slated to collapse soon, gold will reveal its true value. As good as gold! The best way to measure the value of fiat currency is to let the real currency (gold, silver) run free.
Oh and I didnt hear any before gold standard / after gold standard story in this video !!
An hour of work in the past is worth less than an hour of labour in the future. Why?
Because of population growth and innovation in technology.
Thus, a man who takes from his future wealth via debt is destroying his savings that would give him more in the future. Even though gold moves from over valued to under valued it can never go to zero so timing maximizes wealth, savings in gold guarantees it.
You have 6000 years of evidence of such a guarantee not just 30 years.
What you are forgetting is that paper money replaced gold as the common money during the period you are talking about. Therefore, gold's role was temporarily usurped, thus artificially driving demand down. If you look at the period of 1790 to 1910 in the United States, gold held its value almost perfectly.
yes that chart is very interesting however you have left very profound fact in that video. Your data goes back to mid 20 century then beginning of 21st century. That's less than 100years. What is profoundly different today than any previous decade is that we now have 14 trillion dollar national debt. Money supply was doubled to 12 trillion by 2009. Between 1913 thru 2008, money supply hoovered below 7 trillion. Also, in the past US was vastly production based economy. now consumer driven.
an hour of work way back doesnt produce as much goods as an hour could today. i shoulnt have given you 5 stars because that is an epic economic fallacy u held/hold/promoted
An hour of work is an hour of work to the person doing the work. It is that effort which the gold-owner wishes to preserve, I suggest.
The amount of production in an hour has advanced, yes, but I think the point is that gold remains gold - and an hour's working time remains an hour of time - so comparison is valid.
I think my vid shows that the relationship is volatile - more volatile than I expected - and that is the interesting point I hoped to pass on.
which means that Gold has been undervalued...Other factors were stronger than the gold in the past 30 years: "the trust on the dollars and the markets"; however, that is gone today. It will be a paradime shift in the near future.
You forgot to take into account the increase in productivity that has happened over the last 30 years. Why would you want to compare 20 working hours in 1975 with 20 working hours in 2009. It is obvious that due to the advancement in technology, today one man is able to produce in one hour hundreds of times more than than he was able to produce for the same time in 1975. 1 labor h today probably equals 50 from 1975.you could buy much more today with 1 oz of gold than you were able in the past.
It is natural for the price of gold (measured in goods and services) to rise. This is why politicians and economists don't like gold as an official currency. It would limit the supply of currency, which is a recipe for long deflations.
1 hour of time is the same now as it was at any time in the past. Of course, one man's hour may produce less than another man's hour, but over time a comparable hour (average earnings of the day) is the value we hope to protect, imo.
I'd like to be able to pay someone like me for an hour's work with the same gold it took me an hour to earn many years ago - that would truly be storing my value.
U wouldn't want to pay the same amount to the guy, who produces 10 hats per hour and the guy, who produces 1000 hats per hour with the same quality. Since 1975 The Supply of gold has increased roughly by 1% per year, while the World GDP by 3-4%. It is natural to be able to buy more goods and services with 1 oz of gold today. I agree that the price of gold is changing in cycle. Money printing (easy access to cheap credit) has always resulted in a bubble, but u can't easily increase gold's supply
You chart is so correct, gold's value is not less volatile than its value against the the dollar, dowjones and housing. which means that the gold will go up as the dollars, housing and dowjones are in the down due the simple reason that the trust for the dollar, housin and markets has been lost. The policies that protected the dollar and guarantee of our commerce has been destroyed. I believe we are going back to the basis and I see high demand on commodities and real raw assets again.
As you said, timing is an important factor in owning gold, it's not a panacea. If it was a panacea, everyone would want to own it all the time, forcing everyone who didn't have any to drive the price up as they aquired it, until the holders of gold started to sell at the the top and supply started exceeding demand... you get the point. It's a market.
Thanks FOC, it needed to be said. It's never time to marry it, but now is a good time to own it, until it's not.
cont... so gold is equal to all assets created, more assets = greater value of gold. To put it another way, central banks loan all the money and back that money with gold, if it then it doubles the money supply by printing, the gold would double in price.
I would challenge the value of the average wage used in this example. Your hypothosis relys on wages representing the store of value vs work done expressed in dollars. A more appropriate model would be to compare the qty of gold available at a given time versus the amount of money loaned in to existance at that time. This would allow you to assume a constant that would project golds value. You could say supply and demand of assets works in your model but gold is a constant store of value.cont.
golds value is in its scarcity, its weight ,looks, history and no counter party to say it aint worth nothing. You could store wealth in bulkier things like houses, but gold is easier to trade with than houses, wouldnt you say? Its really about personal banking .If you have the metal you got value. The papers only have value when there is trust. no trust, gold rises. And yes, the government manipulation of gold has now been proven.
May be useful to compare it with a wider basket of assets (oil, etc), so the "value" of gold isn't somewhat skewed because of a bubbling asset such as housing. Great videos.
Excellent point - I ducked out of going 'across the board' on commodity comparisons in this one, but feel that the main point of this video is the chart of hours worked to buy 1oz of gold.
I have lots of info on gold/copper, gold/oil, etc but - to be honest - couldn't be bothered putting it all together for this one.
I believe price suppression would have an effect on the chart but would probably not make up the difference.Very interesting chart Flaskman I've never seen it broken down like that.I also see alot of opportunity in that chart because I believe we are going to blow past the 70 hours set in 1980 I look forward to trade my hours in then provided we dont go to hell in a bucket which is very possible.
There were a multitude of fundamental reasons why it had to happen. One being the modernization of China. Before that remember when in the 80s Japan was going to buy the planet?
What goes up must come down what goes down must come up.
wow - that's great info mate! I am leaning towards concluding that the price suppression schemes (naked short selling, etc., by the goldman sachs and jp morgan boys) have totally screwed those who bought gold in previous decades. However, if these price suppression schemes fail in the near future, they are actually a gift for those of us who are buying now (or bought recently) as we will likely see the dollar price for gold sore. We'll see soon I guess... but I like this video. Thanks!
Thank you for viewing the video with an open mind. I posted it as an interesting look from a novel angle, not a suggestion that now is not the time to buy gold.
I remain bullish on gold as long as the underlying fundamentals of unrest, monetary insanity, and future uncertainty prevail... which they certainly do at present.
I was quite surprised to find such wild volatility within the income/gold data and hoped others would find it interesting too.
Yes, this is indeed surprising and interesting. My point is really just how I make sense of it as, researching a little the price suppression schemes from articles and such at GATA, it all seems to make sense and actually complements what you present. There is no guarantee that the price suppression game won't continue to disrupt gold's potential as a store of wealth... but I'm all in at this point in hopes that it will fall apart and gold will sore :)
I agree that there is interference with the gold market, but I suspect that it comes more from having a system including cash settlement contracts than it does from actual manipulation by the banks. Result is the same, but the conspiracy element is less involved. (However, you are right to assume the worst - I'm sure the banks do poke their nose into the gold market deliberately too).
Have you ever read any of the research at Gata(dot)Org?
It is quite convincing, though I am not expert. Apparently there is a huge amount of naked short selling done by 2 or 3 major players in both the silver and gold markets. If this is new info for you, you may find it interesting since you obviously have thought a lot about the gold market.
Sorry - I meant in this cycle. Probably shouldn't have mentioned a number, but I worked out that the 1980 top - shown in that gold/hours chart I made - would equate to about $1,750 today. Just my own guess, and I might change my opinion at some point. ;-)
A lot can change, of course. I'm happily hanging on to my gold for the time being.
I hope you post a video when you are thinking of selling or just when you sell. I have to sell some of mine if I can pick the top in this cycle. I am not a trader and got lucky buying close to the 2008 low. I hope I can time the top over the next few months.
It is being subsidized so we common folk can buy quite a bit, most visibly since the LTCM failure/bailout (gold's non-response to that event motivated the formation of GATA).
TIMING, now appears to be a pretty good time to own it.
I'll it to someone else to counter because you position appear solid Further I was never a believer in the magic of precious metals.. Lastly I was taught that you buy things that got hammered and sell what is soaring on fumes. Now is the time to pick up some property. And eventually there going to be a pile of money for a well timed put on gold and silver
perhaps this chart would look slightly different if the price of gold was allowed to float freely on the markets. As this is not the case your argument fails.
Every market is essentially controlled by the big boys. So in that since yes there is manipulation. And when the big guys work in concert they can do almost anything. But the idea that there's a secret society that for decades are suppressing gold prices is an undiagnosed mental illness.
If Bill Gates wants to drop his entire holdings for whatever reason he could pulled down the DJI for week. That's not manipulation that's a big mass doing what a big mass wants to do. If a central bank wants to sell gold they wants to sell gold.
Yeah, as long as they sell gold that they actually own then you are right. If they start to sell gold that they don't actually own, perhaps even gold that does not even exist.(check GATA). Then I call that manipulation. These type of transactions are not done to make money, they are done to support a belief that something is better then it actually is. Again I call that manipulation of confidence.
Yes, however they prefer to have gold than paper. Another thing, they don't want to give it away to cheap. The pressure is that other countries are buying the USA gold in a very low price. They are winning and the central bank is losing.
Supply is mostly stable. Demand changes based on fear (ie inflation). In the late 70's inflation was a national concern, which decreased as interest rates skyrocketed as the Fed shrank the money supply.
siggyboss 1 month ago
LOL. Gold never changes its value, it is fiat currency that we use to express gold's value that swings drastically. As fiat currencies are slated to collapse soon, gold will reveal its true value. As good as gold! The best way to measure the value of fiat currency is to let the real currency (gold, silver) run free.
Oh and I didnt hear any before gold standard / after gold standard story in this video !!
quadcatfly 1 year ago
An hour of work in the past is worth less than an hour of labour in the future. Why?
Because of population growth and innovation in technology.
Thus, a man who takes from his future wealth via debt is destroying his savings that would give him more in the future. Even though gold moves from over valued to under valued it can never go to zero so timing maximizes wealth, savings in gold guarantees it.
You have 6000 years of evidence of such a guarantee not just 30 years.
davincij15 1 year ago
This has been flagged as spam show
Planned Genocide
1913 - Federal Reserve commie bank planned to fail
1933 - Roosevelt steals all the gold so the hamsters never recover
1964 - JFK murdered, for ending the commie bank, LBJ liquidates the morgan Treasury
1971 - Nixon crook , idiot ends sound money - no idiot objected
2001 - False flag war - counterfeiting world reserve currency into 0 value - idiots
2011 - Planned hyper - inflation - Social Genocide - everybody ends up dead,
USA #1 at death and destruction yay
boots920 1 year ago
Update it to the new housing prices please...
ScrapGoldBusiness 1 year ago
Excellent Video!!
ScrapGoldBusiness 1 year ago
What you are forgetting is that paper money replaced gold as the common money during the period you are talking about. Therefore, gold's role was temporarily usurped, thus artificially driving demand down. If you look at the period of 1790 to 1910 in the United States, gold held its value almost perfectly.
strongbadXCP 1 year ago
yes that chart is very interesting however you have left very profound fact in that video. Your data goes back to mid 20 century then beginning of 21st century. That's less than 100years. What is profoundly different today than any previous decade is that we now have 14 trillion dollar national debt. Money supply was doubled to 12 trillion by 2009. Between 1913 thru 2008, money supply hoovered below 7 trillion. Also, in the past US was vastly production based economy. now consumer driven.
soundzero 1 year ago
an hour of work way back doesnt produce as much goods as an hour could today. i shoulnt have given you 5 stars because that is an epic economic fallacy u held/hold/promoted
freedominsomalia 2 years ago
Hi freedominsomalia.
An hour of work is an hour of work to the person doing the work. It is that effort which the gold-owner wishes to preserve, I suggest.
The amount of production in an hour has advanced, yes, but I think the point is that gold remains gold - and an hour's working time remains an hour of time - so comparison is valid.
I think my vid shows that the relationship is volatile - more volatile than I expected - and that is the interesting point I hoped to pass on.
best wishes.
flaskofcoffee 2 years ago
An interesting and lucid presentation - thank you.
At the end you contend that residential property and money are equally valid stores of wealth compared to gold.
In terms of fluctuation you are correct, however do bear in mind:
1) property can be painfully illiquid at times - it is only a good store of value if you can retrieve that value in a timely manner.
2) fiat money occasionally goes to a zero worth; remember the dollar is not the first such currency even within the USA.
sureseam 2 years ago 2
Gold and silver are not a rational topics of discussion for many people.
cosmosgato 2 years ago
which means that Gold has been undervalued...Other factors were stronger than the gold in the past 30 years: "the trust on the dollars and the markets"; however, that is gone today. It will be a paradime shift in the near future.
SilverRose09 2 years ago
Flask,
Excellent video I like your hours/gold comparison idea.
bunsh1ch1 2 years ago 3
Two words : Gold manipulation.
Nice video though.
doc7474 2 years ago
You forgot to take into account the increase in productivity that has happened over the last 30 years. Why would you want to compare 20 working hours in 1975 with 20 working hours in 2009. It is obvious that due to the advancement in technology, today one man is able to produce in one hour hundreds of times more than than he was able to produce for the same time in 1975. 1 labor h today probably equals 50 from 1975.you could buy much more today with 1 oz of gold than you were able in the past.
malivo 2 years ago
It is natural for the price of gold (measured in goods and services) to rise. This is why politicians and economists don't like gold as an official currency. It would limit the supply of currency, which is a recipe for long deflations.
malivo 2 years ago
Hi malivo.
1 hour of time is the same now as it was at any time in the past. Of course, one man's hour may produce less than another man's hour, but over time a comparable hour (average earnings of the day) is the value we hope to protect, imo.
I'd like to be able to pay someone like me for an hour's work with the same gold it took me an hour to earn many years ago - that would truly be storing my value.
Thanks for the comments.
flaskofcoffee 2 years ago
U wouldn't want to pay the same amount to the guy, who produces 10 hats per hour and the guy, who produces 1000 hats per hour with the same quality. Since 1975 The Supply of gold has increased roughly by 1% per year, while the World GDP by 3-4%. It is natural to be able to buy more goods and services with 1 oz of gold today. I agree that the price of gold is changing in cycle. Money printing (easy access to cheap credit) has always resulted in a bubble, but u can't easily increase gold's supply
malivo 2 years ago
Insightful video Flask, thank you.
webozzy21 2 years ago
Thank you for your time, input and deliberation.
And as ever.. always entertaining to say the least!
smileykai77 2 years ago
Flask,
You chart is so correct, gold's value is not less volatile than its value against the the dollar, dowjones and housing. which means that the gold will go up as the dollars, housing and dowjones are in the down due the simple reason that the trust for the dollar, housin and markets has been lost. The policies that protected the dollar and guarantee of our commerce has been destroyed. I believe we are going back to the basis and I see high demand on commodities and real raw assets again.
SilverRose09 2 years ago
interesting
1989kirby 2 years ago
Comment removed
SilverRose09 2 years ago
As you said, timing is an important factor in owning gold, it's not a panacea. If it was a panacea, everyone would want to own it all the time, forcing everyone who didn't have any to drive the price up as they aquired it, until the holders of gold started to sell at the the top and supply started exceeding demand... you get the point. It's a market.
Thanks FOC, it needed to be said. It's never time to marry it, but now is a good time to own it, until it's not.
NAVYGOLDEIGHTFOUR 2 years ago 2
Buy low sell high unless of course you bought some antiquated technology.
I see the day where landfills will be mined, but I am not investing in any.
Creativity from work is where the value is, learn to build things and DO it
Great video my friend 5*'s
CTOL1 2 years ago 2
cont... so gold is equal to all assets created, more assets = greater value of gold. To put it another way, central banks loan all the money and back that money with gold, if it then it doubles the money supply by printing, the gold would double in price.
pardonwhat 2 years ago
I would challenge the value of the average wage used in this example. Your hypothosis relys on wages representing the store of value vs work done expressed in dollars. A more appropriate model would be to compare the qty of gold available at a given time versus the amount of money loaned in to existance at that time. This would allow you to assume a constant that would project golds value. You could say supply and demand of assets works in your model but gold is a constant store of value.cont.
pardonwhat 2 years ago
Hi Pardon.
For sure, my 'hours/gold' comparison is just one way to look at value, but I felt it worth presenting.
I was intrigued to see the volatility in hours/gold and how important timing is. 1980 and 2000 were clearly extremes, of course.
I also worked out that a price of $1,750/oz for gold would be about the equal to that 1980 peak of 70 x hours, using $50k average salary.
I am looking further into this model to see how it ties in with other indicators.
flaskofcoffee 2 years ago
5 gold stars for this video.
wizardofounce 2 years ago 2
Ahhh - I see your mistake - you are only supposed to compare the price of a good toga and sandles over the range of time...
very interesting though - kind of a bummer too...
artdeco101010 2 years ago 2
Good video man! 5 stars!
patriotsundergod 2 years ago 4
golds value is in its scarcity, its weight ,looks, history and no counter party to say it aint worth nothing. You could store wealth in bulkier things like houses, but gold is easier to trade with than houses, wouldnt you say? Its really about personal banking .If you have the metal you got value. The papers only have value when there is trust. no trust, gold rises. And yes, the government manipulation of gold has now been proven.
1mealperday 2 years ago 2
May be useful to compare it with a wider basket of assets (oil, etc), so the "value" of gold isn't somewhat skewed because of a bubbling asset such as housing. Great videos.
slymartins 2 years ago 2
Excellent point - I ducked out of going 'across the board' on commodity comparisons in this one, but feel that the main point of this video is the chart of hours worked to buy 1oz of gold.
I have lots of info on gold/copper, gold/oil, etc but - to be honest - couldn't be bothered putting it all together for this one.
More to come.
flaskofcoffee 2 years ago
I believe price suppression would have an effect on the chart but would probably not make up the difference.Very interesting chart Flaskman I've never seen it broken down like that.I also see alot of opportunity in that chart because I believe we are going to blow past the 70 hours set in 1980 I look forward to trade my hours in then provided we dont go to hell in a bucket which is very possible.
finster37 2 years ago
Remember the fear of $200 a barrel oil?
There were a multitude of fundamental reasons why it had to happen. One being the modernization of China. Before that remember when in the 80s Japan was going to buy the planet?
What goes up must come down what goes down must come up.
cosmosgato 2 years ago
did you adjust for inflation?
whippoorwillss 2 years ago
Huh?
That was the entire point of the video.
Yes he did.
"Store of wealth"
"time comparison"
cosmosgato 2 years ago
wow - that's great info mate! I am leaning towards concluding that the price suppression schemes (naked short selling, etc., by the goldman sachs and jp morgan boys) have totally screwed those who bought gold in previous decades. However, if these price suppression schemes fail in the near future, they are actually a gift for those of us who are buying now (or bought recently) as we will likely see the dollar price for gold sore. We'll see soon I guess... but I like this video. Thanks!
magichandpuppet 2 years ago 2
Thank you for viewing the video with an open mind. I posted it as an interesting look from a novel angle, not a suggestion that now is not the time to buy gold.
I remain bullish on gold as long as the underlying fundamentals of unrest, monetary insanity, and future uncertainty prevail... which they certainly do at present.
I was quite surprised to find such wild volatility within the income/gold data and hoped others would find it interesting too.
Cheers.
flaskofcoffee 2 years ago
Hey flaskofcoffee,
Yes, this is indeed surprising and interesting. My point is really just how I make sense of it as, researching a little the price suppression schemes from articles and such at GATA, it all seems to make sense and actually complements what you present. There is no guarantee that the price suppression game won't continue to disrupt gold's potential as a store of wealth... but I'm all in at this point in hopes that it will fall apart and gold will sore :)
magichandpuppet 2 years ago 3
Hi magic.
I agree that there is interference with the gold market, but I suspect that it comes more from having a system including cash settlement contracts than it does from actual manipulation by the banks. Result is the same, but the conspiracy element is less involved. (However, you are right to assume the worst - I'm sure the banks do poke their nose into the gold market deliberately too).
flaskofcoffee 2 years ago
Have you ever read any of the research at Gata(dot)Org?
It is quite convincing, though I am not expert. Apparently there is a huge amount of naked short selling done by 2 or 3 major players in both the silver and gold markets. If this is new info for you, you may find it interesting since you obviously have thought a lot about the gold market.
I have really enjoyed your videos by the way!
magichandpuppet 2 years ago
Hi again.
Yes, I read the GATA stuff, but I haven't included it in my videos, so far, as I feel it is well covered on youtube.
I don't worry too much about manipulation of gold by banks - look a how miserably they are failing to suppress it these days. ;-)
I do, however, feel it unwise to assume that gold 'should' be $3000+ on the grounds that banks are holding it down.
There are other fundamentals to consider, as I hoped to demonstrate in the video.
I expect more upside, but not over $2K
flaskofcoffee 2 years ago
>>but not over $2K
Ever?
On a large enough time line I expect the upside to go to infinite :)
magichandpuppet 2 years ago
Sorry - I meant in this cycle. Probably shouldn't have mentioned a number, but I worked out that the 1980 top - shown in that gold/hours chart I made - would equate to about $1,750 today. Just my own guess, and I might change my opinion at some point. ;-)
A lot can change, of course. I'm happily hanging on to my gold for the time being.
I have a tendency to sell things too soon. ;-)
flaskofcoffee 2 years ago
I hope you post a video when you are thinking of selling or just when you sell. I have to sell some of mine if I can pick the top in this cycle. I am not a trader and got lucky buying close to the 2008 low. I hope I can time the top over the next few months.
magichandpuppet 2 years ago
I think I saw that on the X-files tv show :-)
cosmosgato 2 years ago
It is being subsidized so we common folk can buy quite a bit, most visibly since the LTCM failure/bailout (gold's non-response to that event motivated the formation of GATA).
TIMING, now appears to be a pretty good time to own it.
NAVYGOLDEIGHTFOUR 2 years ago
I'll it to someone else to counter because you position appear solid Further I was never a believer in the magic of precious metals.. Lastly I was taught that you buy things that got hammered and sell what is soaring on fumes. Now is the time to pick up some property. And eventually there going to be a pile of money for a well timed put on gold and silver
cosmosgato 2 years ago
perhaps this chart would look slightly different if the price of gold was allowed to float freely on the markets. As this is not the case your argument fails.
leninstreet 2 years ago 2
There is no manipulation.
It is just the normal cycle of human behavior.
Wealth moves from some type paper to some type assets back to paper. on and on
cosmosgato 2 years ago
No manipulation? You sure about .
read the info coming from GATA.
seadog92023 2 years ago 3
Every market is essentially controlled by the big boys. So in that since yes there is manipulation. And when the big guys work in concert they can do almost anything. But the idea that there's a secret society that for decades are suppressing gold prices is an undiagnosed mental illness.
cosmosgato 2 years ago
If Bill Gates wants to drop his entire holdings for whatever reason he could pulled down the DJI for week. That's not manipulation that's a big mass doing what a big mass wants to do. If a central bank wants to sell gold they wants to sell gold.
cosmosgato 2 years ago
Yeah, as long as they sell gold that they actually own then you are right. If they start to sell gold that they don't actually own, perhaps even gold that does not even exist.(check GATA). Then I call that manipulation. These type of transactions are not done to make money, they are done to support a belief that something is better then it actually is. Again I call that manipulation of confidence.
leninstreet 2 years ago 2
Yes, however they prefer to have gold than paper. Another thing, they don't want to give it away to cheap. The pressure is that other countries are buying the USA gold in a very low price. They are winning and the central bank is losing.
SilverRose09 2 years ago