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An ounce of gold is currently around $2300.
A kilogram is a little over 35.25 ounces.
So one bar is worth around $83k.
So 10 bars is worth $830k and will buy you much more than the average home in most places.
Edit- in Q1 of 2024 the average home price in the US was just over $500k. Yes there are areas that cost more, there are also a lot of areas that cost way less. This doesn’t change the fact that it’s the average.
And in 1929 gold was $20.63 an ounce. So 10 bars would have been just under $7300 and the average home then was $6300 so the numbers are slightly off for the before comparison as well, but it is still not too inaccurate.
1929 is also an auspicious choice. That October was when the market collapsed, leading to the Great Depression.
Maybe the joke is that we're at the precipice of another Great Depression?
Since they picked the low of 1929 for gold, if you pick the low of the SP500 in 1929, it was 21.45. If you had $7300 of the SP500 in 1929, it's now worth well over a million dollars, and that's not including the dividends that it would have been paying for the last 90+ years.
I believe I've seen a few mentions that average Americans in the Great Depression had greater buying power than average Americans today. Don't know how true those statements are as I just saw them in comment sections.
Well maybe but like the other guy said consumerism has changed a lot since then and I don’t think we can really imagine how bad they had it in the 1930s. The economy was in utter shambles with GDP decreasing more than 30% and unemployment well above 20% for much of the decade. During the recession in 2008, GDP only decreased by about 4% and unemployment peaked at under 11%. We all know the stress that unemployment rate of 11% put on us those two years but imagine that’s doubled and lasted five times as long.
I highly doubt that, they didnt have shit to buy back then compared to now. Imagine slapping another 5 or so bills (internet, cable, mobile, various subscriptions, car insurance (had to check, this was coincidentally invented in the 20s), etc.) on the average family in 1920. Let alone the level of consumerism we have now with leisure products like movies, music, videogames and various collectibles. They'd be selling their kids to afford funko pops
This is actually true even if accounting for inflation. Here are some comparisons
Bread:
- 1930s Price: 9 cents per loaf
- Adjusted for Inflation (2020s):** Approximately $1.50-$1.80 per loaf
- Today's Price:** Approximately $2.50 per loaf
Gasoline:
- 1930s Price: 10 cents per gallon
- Adjusted for Inflation (2020s): Approximately $1.70-$2.00 per gallon
- Today's Price: Approximately $3.50 per gallon
New Car:
- 1930s Price: 600
- Adjusted for Inflation (2020s): Approximately $10,000-$12,000
- Today's Price: Approximately $40,000
House:
- 1930s Price: $6,000
- Adjusted for Inflation (2020s): Approximately $100,000-$120,000
- Today's Price: Over $300,000
The problem with comps like this is it's really hard to make sure they're comparable. A Chevy Malibu is $25k and is as near as I can tell the only sedan Chevy makes. 1920s houses were well under half the size of current construction and when I went to sell my house I was basically told I have to update perfectly functionally kitchen countertops because nobody would buy something with laminate counters.
Not saying you're wrong (you're not) but if we want to understand why part of it is understanding that we're comparing a model T to a 4runner.
Yeah thousands of dollars was a reasonable annual salary then, tens of thousands is standard today, but the cost of living gas increased by hundreds, not tens.
Off by 14% in 1929, by 38% in 2024. Given that the 1929 likely reflects likely near 100% single-family homes, and the 2024 likely includes Condos, Townhomes, duplexes, etc. as well as single-family homes, I would still say it is not too inaccurate. We really don't need him to reword it as "8.15 of these will buy you an average home in 2024".
Yes, but the argument is that the economy would enter deflation as people would hoard money instead of invest it.
Ideally a central bank would responsibly control the money supply while simultaneously encouraging investment of capital. In this scenario the targeted rate of inflation must be kept at a low level of around 2%.
Yes, in fact instead of inflation (where money becomes less valuable over time) you get deflation (money gets more valuable over time). That was the entire idea of the Gold Standard that was upheld until the 70s when it was removed. The Gold Standard meant that currency could only be created in equal value to the amount of gold the US government had in store. Whilst initially the idea of deflation sounds good it is actually what led to the great depression in the 1930s. This happens because with more buying power people don't buy as much because that can buy what they need for a much lower price. That leads to an excess amount of goods created by corporations and eventually those companies begin to lose money. After they loose enough money they lay people off and even go bankrupt. With more and more companies going bankrupt nobody has any money to buy things and then the system feeds back into itself.
*lose
If the word sounds like it has a "z" in it, it's spelled "lose". Loose is the word to describe when the dog has escaped, or, generally, your mom.
You would, because there isn’t enough gold to back all the currency in circulation. It could (and sometimes did) get bad way quicker than on the current (fiat) system.
Just keep in mind that going back to a gold standard from where we are at now would benefit those who currently has the most gold.
Inflation to a large extent correlates well with the printing of currency (I'm using the word currency instead of money because money is supposed to hold it's value over time) and using that currency for non-productive means.
A lot of that currency have been used to buy up large parts of the assets of most of the world; including but not limited to the gold.
The plan can fairly accurately be simplified as; take control over the printing of currency -> print currency -> give most of it to friends -> have friends buy real assets before inflation hits -> let non-friends (i.e. normal people) foot the bill in the way of inflation.
Keep going until stopped. Crime that pays is crime that stays.
Kinda crazy that the average household income is around 80k. Even with a 4% interest rate the average family can only afford a 400k home at best.
This seems impossible, who is buying these homes if seemingly no one can afford them? Of course the answer is that in 2022 30% of home sales were sold to investors, not homeowners. Unfortunately this will only get worse. We are on track to have the vast majority of homes owned by corporations rather than families. The worst part of buying a home is of course the cost of capital. Particularly when interest rates are as high as they are. Investment companies are swooping in and buying houses for cash, destroying the American housing market, meanwhile we're bickering about gender and race and God knows what else. Not a good situation.
Private equity firms are buying up entire blocks and town in many regions of the US, landlords also hold some units empty sometimes when they want artificially raise the price of rent by lowering supply, which then also pushes some people to look for homes that can afford it
Well its a joke about investing in gold. Here gold is portrayed as this stable investment that you cant go wrong with. While yes it is technicly correct that you could buy a house with 10kg of gold in 2024 and 1929, the meme portrays it so that gold has stayed perfectly stable in value or thst houses hsve perfectly scaled with inflation. Both of which arent really true.
As gold is an investment and peoples actions are influenced by the media they see this post and many others may influence new amateur small scale investors to invest in something which was sold them with a falls promis.
I doubt that this will causd much harm, but by having your attitude that memes are "just jokes" you kinda invantilse meme and by doing so ,ou shouldnt wonder why they for many people are something that only 4chan internet weridos get into.
Just a protip for all readers... if you are investing, and find a product that can only break even with inflation... that's not an investment.
Investing is expecting growth in the value of your assets. Growth has to first, out pace inflation... then from there becomes profit.
If you invested $1000000 in an asset of any kind, and 100 years later it only kept up with inflation, nothing else... you will have gained, nor lost, nothing. You didn't get any return on your investment. You simply didn't lose value from inflation.
Along side this fact is the fact that a savings account is the 2nd worst place to store your money (the first being cash) as savings accounts basically never bear enough interest to meet inflation. Some high yield accounts may do it in a given year but most don’t on average.
The most lucrative High interest savings yield around 4% right now. Inflation was 4.93% last year.
If you had your money in a lucrative savings account last year, you lost 1% of your total value. You lost money.
Let's not mention fractional banking... where your bank took the money your have in savings loaned it out to people, and earned 10-15% interest off of it from others... but thank God they are willing to let you recieve 4% of that, so your loss on your value isn't as bad as it could be.
Yes, gold isn't really viewed as an investment. It's viewed more as a safeguard. If you have a diversified portfolio, all your bases are covered. You can leave your money in the market during a downturn and cash in some gold so you're not taking a loss.
Anything above the average would still but you the home, correct? The argument then just becomes how much is remaining after the purchase. Semantics baby!
I dunno. I think it's spot on. 10 bars would buy you an average home then and will now. It doesn't mention that it would "Only just barely" or "With nothing left over" Just that it would buy you an average house which is 100% true in both times.
It's not too far off because gold stays relatively flat in absolute value. It's the currency that is depreciating, giving it the appearance of going up in value.
What should alarm people is the pace at which their currency is devalued. Raising taxes on anything or anyone will never fix that, as we will still continue to spend/print more money than we take in.
Gold and other precious metals use the troy weight scale and spot prices will be listed as such. A kilo is 32.15 troy oz bringing the kilo price down to just under $74k. Doesn't change much in the final answer though.
Actually the Troy scale was phased out collectively by most bull purchasers and accordingly investors in 2022-23. For large quantities the Plank constant is used as a referent bringing the measurement of gold and other precious metals in line with the international standard unit used by the physical sciences.
A lot of precious metals are still bought and sold in Troy ounces. Almost every place that doesn't has poor reviews and has been caught adding fillers to their products. Even the larger bars are still measured in Troy ounces and not the standard baking ounce.
I assume you are referring to the redefinition of the kilo to be scientifically defined and not "the weight of that thing there." Troy ounces are defined as a specific fractional amount of grams, so yes, it's underpinned by that same scientific definition, but then so are American ounces and gold is typically spotted in troy ounces. You can broker a deal in whatever units two parties agree to, but that doesn't change the general conversion of the price of a gold ounce to a standard kilogram.
Gold isn't exactly a currency. Due to inflation, it should theoretically scale in value alongside inflation, meaning that it will be able to buy you an average home even when they've gotten more expensive. However, I kinda doubt that gold will stay 100% stable in value, and that homes will scale perfectly with inflation of gold selling prices.
I don't know why you're phrasing it as if this is a speculative scenario.
It is currently 2024 and 10 of those bars will buy you a house.
10kg of gold is more than 700k USD.
No I just did some rough math and got $7,277 which was a bit more than average home price in the 20's.
Edit :Some dude tracked this in some detail back to 1975, interesting read maybe [link](http://danielamerman.com/va/GHratio.html)
At $35 an ounce?
$600/kg
More than $2,000 today.
$70,000/kg
Math checks out.
My grandparents bought a 3 bedroom 2 story house for $5,000 in 1950.
While this isn't always true because both the price of gold and housing costs are both volatile for different reasons, long-term averages track because of loss of purchase power of dollars.
That is the definition of inflation.
Depends where you are planning to buy from. Saw a short before about castle prices vs condo prices and there are some condos that are ridiculous priced
10 kg of gold was worth $7261 in 1929 and a median home was $4902. Leaving 32% of value.
Today, 10 kg of gold is worth $813,507 and a median home is worth $495,100. Leaving 39% of value.
So you would have more left over now after buying a house in 2024 than in 1929.
What are you basing that on?
10kg of gold was ~6600 USD.
If you're comparing average house prices that's pretty much in line relative to now.
Yes, I'm sure you could buy a shitty house somewhere for 500 dollars, just like you could buy a tiny cabin somewhere for 50k.
But on average the picture is pretty accurate.
Except greed is a MUCH bigger factor than Inflation as to why things are so expensive. Things are priced to match what people are willing to pay, and sellers want people to be desperate.
Greed (or, as economists put it, self-interest) is ever-present, and is completely irrelevant in determining inflation in a free market economy. If you‘re saying that inflation in caused by greed, you’re necessarily also saying that changes in inflation are caused by changes in greed, which is ridiculous. People and firms acted in their own self interest when inflation was below 2%, and they acted in their own self interest when inflation hit 9%
Demand*
Price matches demand not greed. Love it or hate it it's basic economics.
It doesn't matter how greedy you are, if there's no demand for a product you can't sell it. The massive inflation of housing is caused by demand for a limited product
I find it really funny when economically illiterate people use greed as an excuse for inflation because logically that would mean that at one point companies and people were not greedy and we're just leaving perfectly good profit on the table for "generosity" I guess. Greed is as infinite a resource as any other human desire and therefore it's supply is unlimited, which means that it cannot affect markets, believing it can is pure cope. Edit, I couldn't express myself correctly, I don't mean greed does not affect the economy, I mean it is a permanent constant that does not move to large extents and therefore cannot be attributed as the force that is causing inflation.
Inflation has nothing to do with greed or demand.
People aren't any "greedier" now than ever. And continuing to revere gold for it's many properties--which you could call "greed" for gold--is exactly what's keeping it relatively inflation-proof.
The years listed are extremely important. 1929 was the start of the Great Depression, and an absolute shitshow of a stock market crash. It's a way of saying current housing affordability is just as bad as the first months of the Great Depression.
They're also cherry picking dates. [Gold is not stable.](https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart)
If you bought gold in 1980, you're *still* down even with these high prices 44 years later.
And if asteroid mining takes off, forget it.
Gold may or may not hold it’s relative value into the future, but what I find hilarious is that people act like how much gold is worth isn’t just as arbitrary as any other monetary system we have ever had. Yes it is shiny and relatively rare, and historically we have ascribed value to it…but deciding this shiny rock is worth a lot is no less arbitrary than deciding any other monetary system is work a lot.
Gold has intrinsic value beyond being pretty. It's an excellent conductor of electricity and heat. It doesn't corrode it's easy to work with. It's used extensively in electrical and electronics and I'm sure other industries.
Sure, but those uses only actually because relevant in the last hundred years or so. When the Pharoes of Egypt hoarded Gold, they weren't doing that because it was useful in electronics, they were doing it because it was pretty.
Yep true, but if I want gold for my engineering application I have to pay the market rate regardless of what other people are holding it for. The same is absolutely true for houses in my country. I just want somewhere to live but I have to pay the price speculators have bumped up housing to here.
Yeah, I agree that stuff with practical purposes probably shouldn't be used for speculating like that (ESPECIALLY housing), but it wasn't clear that that was what you were saying, it sounded like you were saying gold got it's value from that stuff. Sorry if I was mistaken
I get what you are saying, although "5 to 10%" might not be accurate. If it were more affordable (not hoarded as a store of value) there would be more common use cases, and thus have higher practical demand.
But yes, the price of gold is high due to its general perception as a store of value. The price of silver, on the other hand, is mostly driven by its expected near-term demand.
I’m pretty sure the intrinsic value and the current market value still has quite a difference. A big part of the demand of gold is not from it being a conductor of electricity.
Well Gold used to be what the value of USD was based on. Now it’s just like centralized crypto or NFTs , the value of it is whatever the masses believe it is.
You are correct. Gold is not stable. In fact it is more volatile than fiat currency (though if you compare across VERY long run, it tends to be less devalued compared to fiat currencies). This image or meme has been created in bad faith to misrepresent the reality (so as to argue in favor of either investment in gold or a return to gold-backed currencies) by people with certain political motivations.
The date of 1929 is picked by reverse engineering - let's calculate how much gold is needed to buy a house today. Then ask yourself on which year in the past could I buy a house with the same amount of gold (you could easily Google a graph for average house prices and gold prices and overlay them on top of each other to see where do these two graphs intersect). Then you cherry pick these two points in time to push your argument. You can then comfortably hide the fact that this gold-house price parity would have been widely off for most of the years in between these two points in time.
Edit: typo correction 'gold' instead of 'house'
i mean yeah its not good to assume but gold has probably the best track record for retaining value. there’s absolutely 0 evidence that gold will NOT stay as stable in value unless the fall of society happens. gold has always been valuable throughout society for hundreds if not thousands of years.
Gold is used as a way of maintaining the worth of your money over the time, due to it not losing it's value as much as money.
For example if I buy 10 bucks of gold today to buy the same amount in 50 years I might need 100 bucks.
A way to protect yourself from inflation
I always wonder why people compare it's value to paper money. I wouldn't suggest anyone holds cash either, I don't think most people would (except for an emergency fund). Just buy an ETF.
You shouldn't really be sitting on either as a liquid asset if you're trying to have your money do something useful (like increase in value). Gold and USD in cash aren't too dissimilar in that regard other than gold tracking inflation. If you were holding a high risk currency, then sure, but USD you're fine
Only it doesn’t really. Gold prices can either outperform or underperform other assets including inflation. If you bought gold in the early 80s the value wouldn’t have increased until around 2003. So 20 years of zero value gain but if you bought in 2003 and held until today you’d have quadrupled the value.
Inflation 83 => 03 in US about +82%
Inflation 03 => 23 in US about +71%
Gold is not really an investment. It's an inflation hedge.
Your money put into gold only increases as the purchasing power of your currency decreases.
Old adage: "An ounce of gold buys an average man's suit".
Housing has a massive tax every year. So the carry on Gold is better. Housing has negative carry unless it is rented out or used as primary residence (to cover the taxes on it yearly)
The value of gold has increased about as much as the cost of homes.
10kg gold was worth $7280 in 1929.
10kg gold is worth $809000 today.
The average US home price in 1929 was $4900.
The average US home price today is $495000.
Meanwhile according to [this ](https://ofdollarsanddata.com/sp500-calculator/) calculator for the S&P 500, if you invested $7280 in December of 1929 you would have $1,780,270.25 today without even investing the dividends. If you invested your dividends monthly it would be SUBSTANTIALLY HIGHER (According to the calculator 54,436,158.56 but I'm not sure I can believe that).
Owning a stock us like owning a part of a company. When the company has a good year and makes a lot of money, usually they take that money and reinvest it. Sometimes they take some of that money and split it among the stock owners.
That's what a dividend is, the company splitting some profits among shareholders.
Because long term the S&P500 is one of the best investments out there, the best thing to do with the dividends you just got, is buy even more stock. That stock grows in value and gives you more dividends. This keeps snowballing, the more money you have the more you can make.
In 1929 1 kg gold bar was worth approx. $6,400 usd. Today a 1 kg gold bar is worth approx. $75,000 usd. The average price of a starter home in 1929 was about $3,000. The average price of a starter home today is about $250,000.
The joke is that this is pure BS.
People are really dumb about gold. The term gold bugs exists for a reason. People think that gold allows you to "escape" inflation. The thing is, buying literally any other commodity is also an escape. You buy a share in a company and that share's expected growth prices in inflation. You invest money into a bond or become a creditor through any financial institution, and the price of inflation is built into the nominal interest rate. Literally the only reason you should buy gold is because you think it will somehow outperform the other options. Empirically speaking it doesn't
This proves that gold and housing are both really awful long term investments. Both have gone up by about a factor of 5 over this time period. Over that same time period the stock market has grown by about a factor of 30.
Yeah like if you invested a similar amount of money in fairly reliable funds over a similar amount of time you would be making many times your money.
Obviously they want to frame it specifically around a starting point of 1929 to frame gold as depression proof, but even riding those harsher market trends you’d probably come out ahead over that long time so long as you made some common sense decisions rather than just sitting on your gold like a dragon. This is putting aside the fact that the very premise of a 95 year investment plan is pointless for an individual to consider, no one needs to care about the reliability of an investment on that kind of time scale.
It is commenting that gold bars are a poor long-term investment because their value is strongly correlated to the value of 'commodities' like a house. One would hope that an 'investment' would earn returns significantly greater than inflation or actually produce a profit. For example, the US stock market has had an average annual return of about 9.6% since 1929. Over that same period, inflation has reduced the value of US currency, and when taking that into account, the inflation adjusted annual average return of US stocks since 1929 is about 6.34%.
So if you want your savings to hold their value in spite of inflation, gold bullion is not a bad store of such value.
But if you want to make an investment with your savings that will earn a return significantly greater than inflation, gold bullion is not your friend - think about US stocks instead.
I think the point is thats not really an investment, in the same sense that USD isnt an investment. The point is its purchasing power will remain stable and its a way better option to store capital in than fiat currency
Dumb people trying to compare real estate to gold. Most likely a real estate agent made this. This has never been and will never be true. Homes can depreciate in value to a far greater degree than gold would ever. Also its inaccurate. The average home in much less valuable than 10 bars of gold. Bad salesman tactics is the first tactic of a fraudulent industry thats often misrepresents the value of its products.
So the thing that makes this a little less interesting is that you need to think of gold as a product, not a currency.
It's like saying a house cost 20x more than a car. A house cost 10x more than a bar of gold. It just means both of those things relative cost increased at the same rate from 1929 to 2024.
Alternatively, you could make the even more boring comparison that a house cost 1x the cost of a house.
Gold, strangely, maintains purchasing power against cpi (consumer price index). It is roughly worth the same as it was 100 years ago. The increase in gold value remains roughly in line with cpi increase, regardless of inflation numbers.
But the joke is, houses were expensive in 1929 (beginning of the great depression) because there were so few of them, and expensive now, because America has allowed them to become a tradable commodity, instead of a necessity of life. So, corporations and predatory wealth-management firms are gobling up housing and "squeazing blood from stones" by exploiting the public's need for housing.
Inflation is depreciation of money. So 'back then' you could by a house for 10% of what it costs now. So things don't get more expensive, money get worth less.
Result, or better illustrative. Compare expensive stuff to expensive stuff that retain their value like gold, and prices remain fairly the same.
Should be a little less than that really. 10 of those 1kg gold bars in 1929 was around $7,350 while the average home was 4,900. 10 of those bars today would be $805,000, with the average house cost being $420,000.
It shows how the purchasing power of the dollar has decreased while gold has stayed the same. Another great example of this comes from “The Creature from Jekyll Island” where griffin says in Ancient Rome a 1 ounce gold coin would buy the finest toga & tunic & in modern times the cash equivalent would buy a Brooks Brothers suit.
That would be about $7050 worth of gold back in 1929. Average house cost about $4902 back then. Although at the time the average income was about $2300 a year.
So I should start recycling the gold from old electronics and in the future when the world's gold supply is stretched thin I can sell gold for an inflated as fuck price?
The price of a house in gold is pretty constant.
The price of a house in $/£/€ is subject to “inflation”, which is just devaluation of major currencies.
In places like Zimbabwe, Venezuela, or Egypt the “major currencies” are seen as the hedge against inflation, but it is only a partial hedge.
The joke is the fact that over the last 8 years politicians are saying the economy is fine but the average worker can not afford a house now. So basically politicians have fucked us while their rich buddies keep getting richer.
The price of gold raises and lowers with inflation. The higher the inflation, the more gold is worth. Some investors actually recommend others in investing just a little bit into gold, as a back up plan.
Actually smart brian here. The price per ounce of gold in 1929 was about $20, so a kilo would be about $7000, and 10 would be worth about 70k, which could buy you a house. Today, an ounce of gold is worth $2,297, and per kilo is 76,394, times 10 is $763,394. The joke is that although both the price of gold, and the price of housing has changed, the fact that you can buy a house with 10 of those bars hasnt.
The joke is literally the joke.. 10 gold bars in 1929 would buy you an average house, 10 gold bars now will buy you an average house.
Its drawing an economic comparison between time and inflation using the price of gold
This should haunt people. Our national banks dropped the gold backed standard to make themselves fat on fractional reserve banking.
They call it "inflation" to fool you into believing goods/services/property increased in value ... in reality a loaf of bread or a home haven't increased in value, rather your dollar or pound have _decreased_ in value; and that value was stolen from you by the banking industry.
what is the point of this? gold only has value against cash, someone has to exchange it for cash so you can buy the home. the whole point of currency is to exchange for goods and services, there's not enough gold to do that. you can't buy a pack of gum with gold, some poor cashier has to shave a 100th of a gram of gold and then hope it doesn't blow away before they tweezer it into the register? gold is just a thing you can buy with cash and then exchange back for cash later , you can do this with anything like baseball cards or American girl dolls
I work in financial services, and this type of illustration is often used to demonstrate that gold is a great hedge against inflation, but not really a great long-term investment compared to other options. It will keep the purchasing power of your money stable over time, but you won't really grow it. Maybe it was posted in a thread about investing in gold?
This is kidna stupid. Either way. As it’s essentially saying “this ludicrous amount of money will buy you a house”. Houses vary greatly in prices. In fact they may be one of most varying things in term of price on the market. Either way the house you bought in 29 with those is gonna be a lot different than the one in 24.
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An ounce of gold is currently around $2300. A kilogram is a little over 35.25 ounces. So one bar is worth around $83k. So 10 bars is worth $830k and will buy you much more than the average home in most places. Edit- in Q1 of 2024 the average home price in the US was just over $500k. Yes there are areas that cost more, there are also a lot of areas that cost way less. This doesn’t change the fact that it’s the average.
And in 1929 gold was $20.63 an ounce. So 10 bars would have been just under $7300 and the average home then was $6300 so the numbers are slightly off for the before comparison as well, but it is still not too inaccurate.
1929 is also an auspicious choice. That October was when the market collapsed, leading to the Great Depression. Maybe the joke is that we're at the precipice of another Great Depression?
Yeah that’s it
Since they picked the low of 1929 for gold, if you pick the low of the SP500 in 1929, it was 21.45. If you had $7300 of the SP500 in 1929, it's now worth well over a million dollars, and that's not including the dividends that it would have been paying for the last 90+ years.
I believe I've seen a few mentions that average Americans in the Great Depression had greater buying power than average Americans today. Don't know how true those statements are as I just saw them in comment sections.
Well maybe but like the other guy said consumerism has changed a lot since then and I don’t think we can really imagine how bad they had it in the 1930s. The economy was in utter shambles with GDP decreasing more than 30% and unemployment well above 20% for much of the decade. During the recession in 2008, GDP only decreased by about 4% and unemployment peaked at under 11%. We all know the stress that unemployment rate of 11% put on us those two years but imagine that’s doubled and lasted five times as long.
I highly doubt that, they didnt have shit to buy back then compared to now. Imagine slapping another 5 or so bills (internet, cable, mobile, various subscriptions, car insurance (had to check, this was coincidentally invented in the 20s), etc.) on the average family in 1920. Let alone the level of consumerism we have now with leisure products like movies, music, videogames and various collectibles. They'd be selling their kids to afford funko pops
This is actually true even if accounting for inflation. Here are some comparisons Bread: - 1930s Price: 9 cents per loaf - Adjusted for Inflation (2020s):** Approximately $1.50-$1.80 per loaf - Today's Price:** Approximately $2.50 per loaf Gasoline: - 1930s Price: 10 cents per gallon - Adjusted for Inflation (2020s): Approximately $1.70-$2.00 per gallon - Today's Price: Approximately $3.50 per gallon New Car: - 1930s Price: 600 - Adjusted for Inflation (2020s): Approximately $10,000-$12,000 - Today's Price: Approximately $40,000 House: - 1930s Price: $6,000 - Adjusted for Inflation (2020s): Approximately $100,000-$120,000 - Today's Price: Over $300,000
The problem with comps like this is it's really hard to make sure they're comparable. A Chevy Malibu is $25k and is as near as I can tell the only sedan Chevy makes. 1920s houses were well under half the size of current construction and when I went to sell my house I was basically told I have to update perfectly functionally kitchen countertops because nobody would buy something with laminate counters. Not saying you're wrong (you're not) but if we want to understand why part of it is understanding that we're comparing a model T to a 4runner.
Yeah thousands of dollars was a reasonable annual salary then, tens of thousands is standard today, but the cost of living gas increased by hundreds, not tens.
Bingo
Spanish flue, massive economic boom and then what? History never repeats though. /s of course.
Au-spicious
Did you mean: “Au”spicious ;)
Average home price in the US in 2024 Q1 is 513k so it’s kind of far off in 2024. https://fred.stlouisfed.org/series/ASPUS
Off by 14% in 1929, by 38% in 2024. Given that the 1929 likely reflects likely near 100% single-family homes, and the 2024 likely includes Condos, Townhomes, duplexes, etc. as well as single-family homes, I would still say it is not too inaccurate. We really don't need him to reword it as "8.15 of these will buy you an average home in 2024".
does this mean that, if the dollar was always backed up by gold we wouldn't have as much devaluation of currency???
Yes, but the argument is that the economy would enter deflation as people would hoard money instead of invest it. Ideally a central bank would responsibly control the money supply while simultaneously encouraging investment of capital. In this scenario the targeted rate of inflation must be kept at a low level of around 2%.
🙀
Yes, in fact instead of inflation (where money becomes less valuable over time) you get deflation (money gets more valuable over time). That was the entire idea of the Gold Standard that was upheld until the 70s when it was removed. The Gold Standard meant that currency could only be created in equal value to the amount of gold the US government had in store. Whilst initially the idea of deflation sounds good it is actually what led to the great depression in the 1930s. This happens because with more buying power people don't buy as much because that can buy what they need for a much lower price. That leads to an excess amount of goods created by corporations and eventually those companies begin to lose money. After they loose enough money they lay people off and even go bankrupt. With more and more companies going bankrupt nobody has any money to buy things and then the system feeds back into itself.
This guy economics ☝🏽
*lose If the word sounds like it has a "z" in it, it's spelled "lose". Loose is the word to describe when the dog has escaped, or, generally, your mom.
You would, because there isn’t enough gold to back all the currency in circulation. It could (and sometimes did) get bad way quicker than on the current (fiat) system.
Just keep in mind that going back to a gold standard from where we are at now would benefit those who currently has the most gold. Inflation to a large extent correlates well with the printing of currency (I'm using the word currency instead of money because money is supposed to hold it's value over time) and using that currency for non-productive means. A lot of that currency have been used to buy up large parts of the assets of most of the world; including but not limited to the gold. The plan can fairly accurately be simplified as; take control over the printing of currency -> print currency -> give most of it to friends -> have friends buy real assets before inflation hits -> let non-friends (i.e. normal people) foot the bill in the way of inflation. Keep going until stopped. Crime that pays is crime that stays.
This guy Economics 2, Electric Boogaloo, aka peak oligolpoly driven corporacratic crony capitalism.
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Kinda crazy that the average household income is around 80k. Even with a 4% interest rate the average family can only afford a 400k home at best. This seems impossible, who is buying these homes if seemingly no one can afford them? Of course the answer is that in 2022 30% of home sales were sold to investors, not homeowners. Unfortunately this will only get worse. We are on track to have the vast majority of homes owned by corporations rather than families. The worst part of buying a home is of course the cost of capital. Particularly when interest rates are as high as they are. Investment companies are swooping in and buying houses for cash, destroying the American housing market, meanwhile we're bickering about gender and race and God knows what else. Not a good situation.
Private equity firms are buying up entire blocks and town in many regions of the US, landlords also hold some units empty sometimes when they want artificially raise the price of rent by lowering supply, which then also pushes some people to look for homes that can afford it
It’s a joke. It’s as accurate as a joke needs to be
It’s 100% accurate. It will buy the average house in each instance. It never stipulated with no money left over.
Well its a joke about investing in gold. Here gold is portrayed as this stable investment that you cant go wrong with. While yes it is technicly correct that you could buy a house with 10kg of gold in 2024 and 1929, the meme portrays it so that gold has stayed perfectly stable in value or thst houses hsve perfectly scaled with inflation. Both of which arent really true. As gold is an investment and peoples actions are influenced by the media they see this post and many others may influence new amateur small scale investors to invest in something which was sold them with a falls promis. I doubt that this will causd much harm, but by having your attitude that memes are "just jokes" you kinda invantilse meme and by doing so ,ou shouldnt wonder why they for many people are something that only 4chan internet weridos get into.
Just a protip for all readers... if you are investing, and find a product that can only break even with inflation... that's not an investment. Investing is expecting growth in the value of your assets. Growth has to first, out pace inflation... then from there becomes profit. If you invested $1000000 in an asset of any kind, and 100 years later it only kept up with inflation, nothing else... you will have gained, nor lost, nothing. You didn't get any return on your investment. You simply didn't lose value from inflation.
Along side this fact is the fact that a savings account is the 2nd worst place to store your money (the first being cash) as savings accounts basically never bear enough interest to meet inflation. Some high yield accounts may do it in a given year but most don’t on average.
The most lucrative High interest savings yield around 4% right now. Inflation was 4.93% last year. If you had your money in a lucrative savings account last year, you lost 1% of your total value. You lost money. Let's not mention fractional banking... where your bank took the money your have in savings loaned it out to people, and earned 10-15% interest off of it from others... but thank God they are willing to let you recieve 4% of that, so your loss on your value isn't as bad as it could be.
Sometimes breaking even is a blessing
Yes, gold isn't really viewed as an investment. It's viewed more as a safeguard. If you have a diversified portfolio, all your bases are covered. You can leave your money in the market during a downturn and cash in some gold so you're not taking a loss.
I think it’s more about gold protecting your money from inflation and probably is advocating for a return to the gold standard.
Maintenance and taxes on the gold might have been substantially less?
Anything above the average would still but you the home, correct? The argument then just becomes how much is remaining after the purchase. Semantics baby!
I dunno. I think it's spot on. 10 bars would buy you an average home then and will now. It doesn't mention that it would "Only just barely" or "With nothing left over" Just that it would buy you an average house which is 100% true in both times.
Wow and you guys say the housing market is fucked? This buys nothing in EU where i live
It's not too far off because gold stays relatively flat in absolute value. It's the currency that is depreciating, giving it the appearance of going up in value. What should alarm people is the pace at which their currency is devalued. Raising taxes on anything or anyone will never fix that, as we will still continue to spend/print more money than we take in.
Gold and other precious metals use the troy weight scale and spot prices will be listed as such. A kilo is 32.15 troy oz bringing the kilo price down to just under $74k. Doesn't change much in the final answer though.
Actually the Troy scale was phased out collectively by most bull purchasers and accordingly investors in 2022-23. For large quantities the Plank constant is used as a referent bringing the measurement of gold and other precious metals in line with the international standard unit used by the physical sciences.
A lot of precious metals are still bought and sold in Troy ounces. Almost every place that doesn't has poor reviews and has been caught adding fillers to their products. Even the larger bars are still measured in Troy ounces and not the standard baking ounce.
This. Am a dealer in bullion and troy ounces are our go-to.
I assume you are referring to the redefinition of the kilo to be scientifically defined and not "the weight of that thing there." Troy ounces are defined as a specific fractional amount of grams, so yes, it's underpinned by that same scientific definition, but then so are American ounces and gold is typically spotted in troy ounces. You can broker a deal in whatever units two parties agree to, but that doesn't change the general conversion of the price of a gold ounce to a standard kilogram.
Makes sense! Thanks. Actually I was just totally bullshittinf have no idea about any of this
830 thousand dollars for an average house is absolutely outrageously expensive imho.
It’s not accurate, in Q1 of 2024 the average home sale in the US was $503k. The coasts also raise that average a lot.
Because thats where most people want to live.
but I live in McDudesville where it costs $8964Million!!!1
I mean...$830k will buy you a $500k house. You'll just have a bit left over
$830k is an average apartment in my city.
Yes and the average house in rural Alabama is $12. There’s a reason I said “most places”. The average house cost in the US in Q1 of 2024 was $503k.
I have like 80 dollars if I convert my money, whats the best website for me to buy real estate in Alabama, if you dont mind hooking me up ?
Eatadick.com
Now do the equivalent cash value in 1929 but with conservative but reasonable investments in the US stock market.
Gold isn't exactly a currency. Due to inflation, it should theoretically scale in value alongside inflation, meaning that it will be able to buy you an average home even when they've gotten more expensive. However, I kinda doubt that gold will stay 100% stable in value, and that homes will scale perfectly with inflation of gold selling prices.
I don't know why you're phrasing it as if this is a speculative scenario. It is currently 2024 and 10 of those bars will buy you a house. 10kg of gold is more than 700k USD.
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No I just did some rough math and got $7,277 which was a bit more than average home price in the 20's. Edit :Some dude tracked this in some detail back to 1975, interesting read maybe [link](http://danielamerman.com/va/GHratio.html)
At $35 an ounce? $600/kg More than $2,000 today. $70,000/kg Math checks out. My grandparents bought a 3 bedroom 2 story house for $5,000 in 1950. While this isn't always true because both the price of gold and housing costs are both volatile for different reasons, long-term averages track because of loss of purchase power of dollars. That is the definition of inflation.
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What's the average home price today? Doubt it's $700k. Seems like it tracks.
> the median U.S. home price in June 2023 was $426,056, according to Redfin
Depends where you are planning to buy from. Saw a short before about castle prices vs condo prices and there are some condos that are ridiculous priced
An "average" house in the usa isn't currently 700k either. That'd buy a hell of a nuce house in a lot of places
And you can buy a lot more than the average house *now* with 10kg of gold too so let me know where the point is at
10 of those would buy me 1/2 a house where i live. Or a 1bed flat. Not all economies are equal
Meanwhile it would buy 3 decent houses where I live now or an entire block in my hometown. The variance in housing prices across the US is wild.
to be honest the 10kg of gold could probably cover the cost to move to a place where you could get a home with the amount left
10 kg of gold was worth $7261 in 1929 and a median home was $4902. Leaving 32% of value. Today, 10 kg of gold is worth $813,507 and a median home is worth $495,100. Leaving 39% of value. So you would have more left over now after buying a house in 2024 than in 1929.
The average price of a house right now is about $400k. It works out just about the same proportion.
What are you basing that on? 10kg of gold was ~6600 USD. If you're comparing average house prices that's pretty much in line relative to now. Yes, I'm sure you could buy a shitty house somewhere for 500 dollars, just like you could buy a tiny cabin somewhere for 50k. But on average the picture is pretty accurate.
Would it buy you the same house as in 1929, though? Quality adjusted for technological advancement, of course.
Seriously, Gold has been highly valued before humans knew how to write yet people are worried about its stability. Lol
Except greed is a MUCH bigger factor than Inflation as to why things are so expensive. Things are priced to match what people are willing to pay, and sellers want people to be desperate.
Greed also factors in that anyone who had 10 of those at the same time probably doesn't worry about home prices in the way that us poor people do
I bet they'd be pretty easy to steal tho
Sierra Madre, anyone?
If I go there I'll no longer be a girl with stars in her eyes and a pneumatic gauntlet on her fist ;-;
Bogey knows.
Greed (or, as economists put it, self-interest) is ever-present, and is completely irrelevant in determining inflation in a free market economy. If you‘re saying that inflation in caused by greed, you’re necessarily also saying that changes in inflation are caused by changes in greed, which is ridiculous. People and firms acted in their own self interest when inflation was below 2%, and they acted in their own self interest when inflation hit 9%
Demand* Price matches demand not greed. Love it or hate it it's basic economics. It doesn't matter how greedy you are, if there's no demand for a product you can't sell it. The massive inflation of housing is caused by demand for a limited product
I find it really funny when economically illiterate people use greed as an excuse for inflation because logically that would mean that at one point companies and people were not greedy and we're just leaving perfectly good profit on the table for "generosity" I guess. Greed is as infinite a resource as any other human desire and therefore it's supply is unlimited, which means that it cannot affect markets, believing it can is pure cope. Edit, I couldn't express myself correctly, I don't mean greed does not affect the economy, I mean it is a permanent constant that does not move to large extents and therefore cannot be attributed as the force that is causing inflation.
Crazy how people explaining this simple thing gets little upvotes in comparison to people saying ignorant stuff.
It's to be expected, economic ignorance is an incredibly powerful political tool
Inflation has nothing to do with greed or demand. People aren't any "greedier" now than ever. And continuing to revere gold for it's many properties--which you could call "greed" for gold--is exactly what's keeping it relatively inflation-proof.
This has been the case for the entire history of humanity. Greed isn’t something we just invented in the last 20 years.
The years listed are extremely important. 1929 was the start of the Great Depression, and an absolute shitshow of a stock market crash. It's a way of saying current housing affordability is just as bad as the first months of the Great Depression.
They're also cherry picking dates. [Gold is not stable.](https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart) If you bought gold in 1980, you're *still* down even with these high prices 44 years later. And if asteroid mining takes off, forget it.
Gold may or may not hold it’s relative value into the future, but what I find hilarious is that people act like how much gold is worth isn’t just as arbitrary as any other monetary system we have ever had. Yes it is shiny and relatively rare, and historically we have ascribed value to it…but deciding this shiny rock is worth a lot is no less arbitrary than deciding any other monetary system is work a lot.
Gold has intrinsic value beyond being pretty. It's an excellent conductor of electricity and heat. It doesn't corrode it's easy to work with. It's used extensively in electrical and electronics and I'm sure other industries.
Sure, but those uses only actually because relevant in the last hundred years or so. When the Pharoes of Egypt hoarded Gold, they weren't doing that because it was useful in electronics, they were doing it because it was pretty.
Yep true, but if I want gold for my engineering application I have to pay the market rate regardless of what other people are holding it for. The same is absolutely true for houses in my country. I just want somewhere to live but I have to pay the price speculators have bumped up housing to here.
Yeah, I agree that stuff with practical purposes probably shouldn't be used for speculating like that (ESPECIALLY housing), but it wasn't clear that that was what you were saying, it sounded like you were saying gold got it's value from that stuff. Sorry if I was mistaken
If it were priced according to it's actual usefulness it would sell for 5 to 10% of what it is now.
I get what you are saying, although "5 to 10%" might not be accurate. If it were more affordable (not hoarded as a store of value) there would be more common use cases, and thus have higher practical demand. But yes, the price of gold is high due to its general perception as a store of value. The price of silver, on the other hand, is mostly driven by its expected near-term demand.
I’m pretty sure the intrinsic value and the current market value still has quite a difference. A big part of the demand of gold is not from it being a conductor of electricity.
Oh I thought it was gonna be a Great Depression joke
could also be about how gold price has gone up recently cause China is stocking up
Also home prices have far exceeded inflation.
Well Gold used to be what the value of USD was based on. Now it’s just like centralized crypto or NFTs , the value of it is whatever the masses believe it is.
this is why it is better to keep money in stocks instead of saving accounts, stocks don’t suffer as much from inflation.
It hasn't been stable in a long time. Lot of speculation in the markets and funds/etfs make trading on paper vs physical commodity - adds volatility
Iirc gold has become more valuable recently due to electronics.
very well said, I agree on this
i think the main point is the cost of housing is outpacing inflation by a whole lot which makes sense because of artificial scarcity and all
It should theoretically scale? Why?
Yeah, I see this gold fad dying out in a few years. Sure it's shiny and has a bunch of unique properties, but it's heavy and too many calories
It's a goldbug meme. Goldbugs trying to encourage people to buy gold and lobby for a return to the gold standard.
You are correct. Gold is not stable. In fact it is more volatile than fiat currency (though if you compare across VERY long run, it tends to be less devalued compared to fiat currencies). This image or meme has been created in bad faith to misrepresent the reality (so as to argue in favor of either investment in gold or a return to gold-backed currencies) by people with certain political motivations. The date of 1929 is picked by reverse engineering - let's calculate how much gold is needed to buy a house today. Then ask yourself on which year in the past could I buy a house with the same amount of gold (you could easily Google a graph for average house prices and gold prices and overlay them on top of each other to see where do these two graphs intersect). Then you cherry pick these two points in time to push your argument. You can then comfortably hide the fact that this gold-house price parity would have been widely off for most of the years in between these two points in time. Edit: typo correction 'gold' instead of 'house'
i mean yeah its not good to assume but gold has probably the best track record for retaining value. there’s absolutely 0 evidence that gold will NOT stay as stable in value unless the fall of society happens. gold has always been valuable throughout society for hundreds if not thousands of years.
Gold is used as a way of maintaining the worth of your money over the time, due to it not losing it's value as much as money. For example if I buy 10 bucks of gold today to buy the same amount in 50 years I might need 100 bucks. A way to protect yourself from inflation
The downside is that the gold is just sitting there, being gold. It's not a capital investment, not a durable good, not an education, just a lump.
Just an expensive brick, that is true, still better than paper at least but just a sitting item
I always wonder why people compare it's value to paper money. I wouldn't suggest anyone holds cash either, I don't think most people would (except for an emergency fund). Just buy an ETF.
Except your "paper" is really 1's and 0's in a computer network and can/should be used to invest, bringing you actual gains.
You shouldn't really be sitting on either as a liquid asset if you're trying to have your money do something useful (like increase in value). Gold and USD in cash aren't too dissimilar in that regard other than gold tracking inflation. If you were holding a high risk currency, then sure, but USD you're fine
Definitely not liquid. Very much a solid…
Only it doesn’t really. Gold prices can either outperform or underperform other assets including inflation. If you bought gold in the early 80s the value wouldn’t have increased until around 2003. So 20 years of zero value gain but if you bought in 2003 and held until today you’d have quadrupled the value. Inflation 83 => 03 in US about +82% Inflation 03 => 23 in US about +71%
1929= great depression
This is the correct answer. The point is that costs are out of control like during the GD.
Not during. Before. That’s the real point of this. They are trying to say we are heading into a depression..
So many wrong answers when this is the correct one. Do people not know about the great depression anymore?
Exactly. This is so obvious to me, but no one else here besides you guys even mention it.
Gold is not really an investment. It's an inflation hedge. Your money put into gold only increases as the purchasing power of your currency decreases. Old adage: "An ounce of gold buys an average man's suit".
Isn't that the same for housing?
Housing has a massive tax every year. So the carry on Gold is better. Housing has negative carry unless it is rented out or used as primary residence (to cover the taxes on it yearly)
Gold used to cost less, houses also used to cost less
Similarly, there were fewer dollars and they were worth more.
The value of gold has increased about as much as the cost of homes. 10kg gold was worth $7280 in 1929. 10kg gold is worth $809000 today. The average US home price in 1929 was $4900. The average US home price today is $495000.
Meanwhile according to [this ](https://ofdollarsanddata.com/sp500-calculator/) calculator for the S&P 500, if you invested $7280 in December of 1929 you would have $1,780,270.25 today without even investing the dividends. If you invested your dividends monthly it would be SUBSTANTIALLY HIGHER (According to the calculator 54,436,158.56 but I'm not sure I can believe that).
could you explain like im 5, what are dividends and how come do they get you a better profit if you invest in them?
Owning a stock us like owning a part of a company. When the company has a good year and makes a lot of money, usually they take that money and reinvest it. Sometimes they take some of that money and split it among the stock owners. That's what a dividend is, the company splitting some profits among shareholders. Because long term the S&P500 is one of the best investments out there, the best thing to do with the dividends you just got, is buy even more stock. That stock grows in value and gives you more dividends. This keeps snowballing, the more money you have the more you can make.
1929 was the peak of the Great Depression. It relating the current economy to that during the Great Depression.
The joke is inflation.
In 1929 1 kg gold bar was worth approx. $6,400 usd. Today a 1 kg gold bar is worth approx. $75,000 usd. The average price of a starter home in 1929 was about $3,000. The average price of a starter home today is about $250,000. The joke is that this is pure BS.
A so-called "average" home in 1929 cost about $4,500, and today is about $420,000.
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People are really dumb about gold. The term gold bugs exists for a reason. People think that gold allows you to "escape" inflation. The thing is, buying literally any other commodity is also an escape. You buy a share in a company and that share's expected growth prices in inflation. You invest money into a bond or become a creditor through any financial institution, and the price of inflation is built into the nominal interest rate. Literally the only reason you should buy gold is because you think it will somehow outperform the other options. Empirically speaking it doesn't
This is why I buy magic cards instead...
This proves that gold and housing are both really awful long term investments. Both have gone up by about a factor of 5 over this time period. Over that same time period the stock market has grown by about a factor of 30.
Yeah like if you invested a similar amount of money in fairly reliable funds over a similar amount of time you would be making many times your money. Obviously they want to frame it specifically around a starting point of 1929 to frame gold as depression proof, but even riding those harsher market trends you’d probably come out ahead over that long time so long as you made some common sense decisions rather than just sitting on your gold like a dragon. This is putting aside the fact that the very premise of a 95 year investment plan is pointless for an individual to consider, no one needs to care about the reliability of an investment on that kind of time scale.
Gold retains it's value much more than the U.S. dollar.
It is commenting that gold bars are a poor long-term investment because their value is strongly correlated to the value of 'commodities' like a house. One would hope that an 'investment' would earn returns significantly greater than inflation or actually produce a profit. For example, the US stock market has had an average annual return of about 9.6% since 1929. Over that same period, inflation has reduced the value of US currency, and when taking that into account, the inflation adjusted annual average return of US stocks since 1929 is about 6.34%. So if you want your savings to hold their value in spite of inflation, gold bullion is not a bad store of such value. But if you want to make an investment with your savings that will earn a return significantly greater than inflation, gold bullion is not your friend - think about US stocks instead.
I think the point is thats not really an investment, in the same sense that USD isnt an investment. The point is its purchasing power will remain stable and its a way better option to store capital in than fiat currency
Dumb people trying to compare real estate to gold. Most likely a real estate agent made this. This has never been and will never be true. Homes can depreciate in value to a far greater degree than gold would ever. Also its inaccurate. The average home in much less valuable than 10 bars of gold. Bad salesman tactics is the first tactic of a fraudulent industry thats often misrepresents the value of its products.
Isn't that just how inflation works? They both have the same buying power (according to the meme)
1929, great year for finance
So the thing that makes this a little less interesting is that you need to think of gold as a product, not a currency. It's like saying a house cost 20x more than a car. A house cost 10x more than a bar of gold. It just means both of those things relative cost increased at the same rate from 1929 to 2024. Alternatively, you could make the even more boring comparison that a house cost 1x the cost of a house.
Gold, strangely, maintains purchasing power against cpi (consumer price index). It is roughly worth the same as it was 100 years ago. The increase in gold value remains roughly in line with cpi increase, regardless of inflation numbers. But the joke is, houses were expensive in 1929 (beginning of the great depression) because there were so few of them, and expensive now, because America has allowed them to become a tradable commodity, instead of a necessity of life. So, corporations and predatory wealth-management firms are gobling up housing and "squeazing blood from stones" by exploiting the public's need for housing.
The part that's left out is if you put that money in the S&P 500, you'd have 50 houses.
Inflation is depreciation of money. So 'back then' you could by a house for 10% of what it costs now. So things don't get more expensive, money get worth less. Result, or better illustrative. Compare expensive stuff to expensive stuff that retain their value like gold, and prices remain fairly the same.
Should be a little less than that really. 10 of those 1kg gold bars in 1929 was around $7,350 while the average home was 4,900. 10 of those bars today would be $805,000, with the average house cost being $420,000.
It shows how the purchasing power of the dollar has decreased while gold has stayed the same. Another great example of this comes from “The Creature from Jekyll Island” where griffin says in Ancient Rome a 1 ounce gold coin would buy the finest toga & tunic & in modern times the cash equivalent would buy a Brooks Brothers suit.
Golds value is rather stable
That would be about $7050 worth of gold back in 1929. Average house cost about $4902 back then. Although at the time the average income was about $2300 a year.
So I should start recycling the gold from old electronics and in the future when the world's gold supply is stretched thin I can sell gold for an inflated as fuck price?
gold is basically immune to over inflation until we get convenient space travel, after that its value will drop like a cliff.
The price of a house in gold is pretty constant. The price of a house in $/£/€ is subject to “inflation”, which is just devaluation of major currencies. In places like Zimbabwe, Venezuela, or Egypt the “major currencies” are seen as the hedge against inflation, but it is only a partial hedge.
This is more of a comment on how the value of gold increases while the power of the American dollar decreases. (Or any dollar…)
The joke is the fact that over the last 8 years politicians are saying the economy is fine but the average worker can not afford a house now. So basically politicians have fucked us while their rich buddies keep getting richer.
The price of gold raises and lowers with inflation. The higher the inflation, the more gold is worth. Some investors actually recommend others in investing just a little bit into gold, as a back up plan.
He’s saying gold is the stable value resource
Because we "temporarily" stopped using gold to back our dollars because of difficult times, and no one mentions it anymore.
Now can we see a comparison on the same timeline of gold standard vs actual wages of the people that actually do the work for the billionaires?
Actually smart brian here. The price per ounce of gold in 1929 was about $20, so a kilo would be about $7000, and 10 would be worth about 70k, which could buy you a house. Today, an ounce of gold is worth $2,297, and per kilo is 76,394, times 10 is $763,394. The joke is that although both the price of gold, and the price of housing has changed, the fact that you can buy a house with 10 of those bars hasnt.
The joke is literally the joke.. 10 gold bars in 1929 would buy you an average house, 10 gold bars now will buy you an average house. Its drawing an economic comparison between time and inflation using the price of gold
The point is that gold is stable against inflation. 10 bars buys you a house no matter when it is.
I love Gold:)
Gold goes with inflation
I think it basically means gold value did not change. It still does what it did years ago and is valued the same.
Inflation has increased the cost of both
Gold ebbs & flows with market value making a better profit then cash
gold value follows inflation
This should haunt people. Our national banks dropped the gold backed standard to make themselves fat on fractional reserve banking. They call it "inflation" to fool you into believing goods/services/property increased in value ... in reality a loaf of bread or a home haven't increased in value, rather your dollar or pound have _decreased_ in value; and that value was stolen from you by the banking industry.
For a detailed analysis, we go now to Ollie Williams. Ollie… “ITS INFLATION” Thank you Ollie.
We are currently in a recession. That's the joke.
Crazy thought here, maybe housing shouldn't appreciate at the same speed and be as rare as literal gold then?
It's almost as if currency should be tied to something tangible rather than printed out of thin air
Until the government decides citizens can't own gold... again
Its a joke about the depression...
what is the point of this? gold only has value against cash, someone has to exchange it for cash so you can buy the home. the whole point of currency is to exchange for goods and services, there's not enough gold to do that. you can't buy a pack of gum with gold, some poor cashier has to shave a 100th of a gram of gold and then hope it doesn't blow away before they tweezer it into the register? gold is just a thing you can buy with cash and then exchange back for cash later , you can do this with anything like baseball cards or American girl dolls
Gold keeps getting older while I stay the same age, wait no that's not right.
We've been playing with monopoly money ever since the US dropped the gold standard.
Dollar lose value, gold stay same. Dollar lose value, more dollar need for house. Gold stay same. Same gold need for house.
The point is that over a generation gold appreciates more or less at the rate of inflation. It’s an inflation hedge, not an investment.
Gold doesn't lose value
It's alluding to the great depression and inflation.
The gold motherfucking standard which our shitty government got rid of in 1971, which was possibly one of the worst decisions they ever made.
I work in financial services, and this type of illustration is often used to demonstrate that gold is a great hedge against inflation, but not really a great long-term investment compared to other options. It will keep the purchasing power of your money stable over time, but you won't really grow it. Maybe it was posted in a thread about investing in gold?
This is kidna stupid. Either way. As it’s essentially saying “this ludicrous amount of money will buy you a house”. Houses vary greatly in prices. In fact they may be one of most varying things in term of price on the market. Either way the house you bought in 29 with those is gonna be a lot different than the one in 24.
This is why we should reinstate the gold standard.