<quote name="Andy Bradford" date="Thu, 4 Dec 2008 at 22:02 -0700"> > Thus said Von Fugal on Thu, 04 Dec 2008 11:12:03 MST: > > > It's true, to say that a pie in 1933 was worth this much gold, and now > > we have this many pies, there's not enough gold. The truth is each pie > > would be worth LESS gold. > > Here's a fun thought problem... how much pie would an ounce of gold buy > in 1933? Now, here comes Roosevelt, turn in your $20 gold piece for $20 > fiat dollars. Time passes, its now 2008. How much pie will one ounce of > gold buy? How much pie will your $20 fiat dollar buy? Interesting... I couldn't find any pie prices, though.
> Here's the T-bone steak test (which I credit to Michael S. Roeff): > > http://news.google.com/newspapers?nid=336&dat=19200528&id=Kh4KAAAAIBAJ&sjid=fEcDAAAAIBAJ&pg=4639,2810957 > > Notice that T-bone steak was $.25 per pound (assuming I'm reading it > correctly) in 1929. That $20 gold coin would buy 80 pounds of T-bone > steak. I haven't looked at prices recently, but how much does a T-bone > steak cost now, maybe $8 per pound? So, you can buy 2 pounds of T-bone > steaks with your $20 fiat, while someone holding gold can buy roughly 80 > pounds (maybe more). > > There, in plain and simple terms is the difference between fiat money > and commodity, market selected, money. I couldn't find a T-Bone, but a new york steak was 7. So yeah, about 3 pounds with the 20$. That one ounce of gold (I think $20 was one ounce) would now buy about $750 worth, or 107 pounds. Before the credit crunch, it was we'll call it $900, or 128 pounds. Looking at this naively you could say that this shows beef as being about 50% cheaper. But who knows how the value of gold would be a little different with using it as money. It wouldn't be a lot different though, not 50% different. > > I am oversimplifying a lot in all these points, but I can't stand by > > and let the equally oversimplified statement "gold doesn't scale" just > > sit there. > > Gold is just an ancient relic... An ancient relic that scales. :) Von Fugal -- Government is a disease that masquerades as its own cure -- Robert Lefevre
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