Bart, the oil = gold argument isn't like conservation of heat, conservation of momentum, or a factory production line where oil goes in one end and gold comes out the other and there is a 1:1 correspondence in each case.
In the case of oil being turned into gold, it is trivially true that plenty of oil does not go into making gold in any way. That doesn't change the relationship substantially. There are also the normal volatilities in pricing of anything as hordes guess the "right" price for everything. But as TJ has commented many times, if you look for a single number which explains everything, the price of gold is a reasonable measure. Not as precise as 42, but quite good all the same. en.wikipedia.org
For example, if you looked at the price of gold since long ago, but couldn't see anything else, you would notice quite a spectacular change from 1971 when Nixon and co dropped the gold standard for real. In 1979, the price of gold would have indicated something up too [and that was of course oil, not to mention Iran going awol]. For the next twenty years gold fell to an "all-time" low of $280. Without looking, it would be easy to guess that oil was probably at a low then too. Peeking at prices, that indeed was the case. Since then, the price of oil has gone [guessing from the price of gold] down .... ooops, no wrong guess... it went up. Heck, pretty much 8 x which is oddly enough the same as gold, near enough for government work [or even actual privately funded excavations in Australia].
No diversions.
Mqurice T |
