But I stand by my opinion that $100 current dollars is way too low for a historical average POG
I don't recall saying $100 current dollars is an historical average for POG. I don't think our discussion needs to convert POG to any fiat currency, because we can talk in terms of a good suit of clothes, or some other good or service we can agree is representative of some past period of time.
If we look at cars as basic transport around town, perhaps we should compare with a horse and buggy. It would take about 65 oz of Au to buy a $20000 car today. A hundred years ago, and horse and buggy could be bought for say $100 (a guess). That's about 5 oz of gold then. Either gold has deflated like a fiat currency, or we have somehow moved up the socioeconomic scale by having a car instead of a horse and buggy, or a bit of both. And before someone brings up costs to keep a horse in a stable,...consider the maintenance, insurance and gas costs to run a car and keep it in the garage.
Clothing is unnaturally depressed since it is now mostly made in countries which use slave labor and/or have currencies crushed by the bloated dollar.
The average family made most of their own clothes a half century or so ago. If you use a breadmaker to produce your loaf of bread, the cost of a loaf of bread is not more than it was 40 years ago. It was $0.25, in nominal dollars to buy at the bakery,...I was sent to the store back in the sixties to buy bread so I can confirm this data, and it costs me $0.25 now in my breadmaker,...including electricity.
As I said in the last piece, many are confusing inflation with increase in costs associated with moving up the socioeconomic scale. Now in North America we play video games, watch TV, eat out,etc,...activities of Kings and the rich elite a few hundred years ago. Costs will increase as one moves up the socioeconomic scale, and one increasingly becomes dependant on others for basic needs. For a world view on inflation, and a less North American centric view, you would have to go to a more typical population of this world,...perhaps a farmer in Asia, the Middle East or Africa. Those of us living in the rich elite areas of the world are not typical of the socioeconomic average of the world today.
Average person needs gold??
As you said, the average person is concerned with food, shelter, transportation and clothing,...I don't think wearing gold as jewelry is essential for any of these things,...but your wife may disagree (gggggggggggggggg) Nonetheless, we could do all these things without wearing gold jewelry which goes back to that quote of mine you like,...I will not speculate what group she might fit into, nor suggest we need to add another group to the quote (gggggggggggggg)
Gold? What is this stuff anyway.
I'm not sure why people view bits of gold metal as different from a piece of paper or plastic with some squiggly lines on it. Both need two humans to agree on what they are worth in an exchange. Both can be counterfeit. Both can be inflated and deflated. To restrict borrowing and socioeconomic growth to the amount of some commodity someone possesses is not intelligent to me. Growth should only be limited by the intelligence, ingenuity and hard work of people. A nations currency should be similarly backed by these same things. If the US dollar is a global currency, then the global community decides what its value will be,...in the short term it is only an intermediate in a transaction. For long term savings, neither a currency, or gold is worthy. You should put your savings in something that can grow over time based on its current and future economic production potential. Companies, land, personal training and knowledge etc.
Gold is battling back from a sell off the last few days. Goldbugs are a battle hardened, resilent bunch. US$300 is a profitable price for the majority of producing mines, and many properties undergoing feasibility studies will make money as well, so many gold stocks look good these days. You'll get no argument from me that we shouldn't continue to hold ones that can grow revenues and profitability per share. Hedged companies have done that, and so have unhedged ones.
I do not see that a sea change in the gold markets is coming. No one has ever been able to predict the POG with long term success. Only supply and demand will determine what happens, and no one knows how much supply their really is either above or below ground. I suggest that 99% of the prospective ground for economic gold deposits remains to be explored using modern mining methods. Ground that was thought barren in many very old mining camps are now finding millions more oz, and new theories of deposition are showing many more oz could be found. Demand is also very fickle, ebbing and flowing more with emotion than any fundamental reason.
The moves in the POG from here also depend on what country you are in, and what currency you are using. Gold could actually drop in value in relation to many currencies in the future, reducing profitability of several gold companies if as you say, the US dollar implodes. I don't think the US dollar will do much of anything in the short term myself, it has become the world's currency and I think its moves in value will be slow. As a world currency, trade deficits, interest rates, and most economic policies of the home country, or any country are probably irrelevant. Supply and demand are more important as long as the world accepts it as their currency, and I think it is safe to say that the world seems to be demanding more US dollars than are currently in circulation.
You should talk over here. Searle Sennett loves to discuss gold and currency things. He has a different world outlook being based in South Africa, and can give you a stimulating discussion. You should link a few of our posts to give him the basics of our debates so far.
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