S&P 500 Investment (with Dividends Reinvested) Historical data shows that $10,000 invested in the S&P 500 at the start of 1950, with all dividends reinvested, would grow to approximately $3,836,763 by the end of 2025.
Gold provided pure price appreciation (no yield or dividends). The multiplier is about 124.7× ($4,360 ÷ $35), or an annualized return of roughly 6.8% over 75 years.
Ounces purchased in 1950: $10,000 ÷ $35/oz ≈ 285.71 ounces
Current value: 285.71 oz × $4,360/oz ≈ $1,246,700
Wait...I might want something more secure than that. And if I have a lot of gold I might need to pay people to protect it. These storage costs are going up.
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.
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.
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 source of their recent appreciation and accusations of "hidden" inflation. But central banks operate in an anarchic world system, 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 myself 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. 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.
See https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus...
I need to see both of them priced in loaves of bread.
xeckr•5h ago
stephen_g•2h ago
xeckr•2h ago
ajross•53m ago
History of what now? Gold is a volatile commodity. It has crashed, many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000.
And given its value right now, it's probably due for another.
OutOfHere•1h ago
stego-tech•52m ago
For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands.
Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.