Chart of the day: Hours of work needed to buy an ounce of gold

By Global Macro Monitor

More great work from our friends at The Chart Store. It now takes over 88 hours of work at the average hourly wage to buy an ounce of gold. What an incredible increase in the relative price of gold and loss of confidence in fiat currency. Sorry, PK, it ain’t just about Glenn Beck’s marketing campaign.

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Could it be the anticipation of a period of massive monetization of unpayable sovereign debt? Or could it be just a huge bubble? You decide.

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Let’s hope we’re not running charts in a few years (let’s hope we’re still around) on the number hours needed to buy a loaf of bread. Stay tuned, BTW, for the number hours work needed to buy a bushel of wheat.

And there’s the rub. Central banks have done a great job at driving up the price of gold but a horrible job at creating wage inflation. If it now takes 88 hours to buy an ounce of gold versus 20 hours in 2000, hasn’t that grossly deflated real wages in a strict monetary sense? Just askin’.

hours of work needed to buy an ounce of gold

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2 Comments
  1. Mathieson Sterling says

    If it now takes 88 hours to buy an ounce of gold versus 20 hours in 2000, hasn’t that grossly deflated real wages in a strict monetary sense?
    No, because workers don’t want gold, they want goods.  If this actually was inflation, not only would CPI be high, but you’d see the price of oil and other actual commodities following the price of gold.  Instead over a 10 year period you’ve seen the price of oil go up in real terms no more than 20%, while the price of gold has doubled.  With the price of housing included, general prices have barely moved.

  2. Mathieson Sterling says

    If it now takes 88 hours to buy an ounce of gold versus 20 hours in 2000, hasn’t that grossly deflated real wages in a strict monetary sense?
    No, because workers don’t want gold, they want goods.  If this actually was inflation, not only would CPI be high, but you’d see the price of oil and other actual commodities following the price of gold.  Instead over a 10 year period you’ve seen the price of oil go up in real terms no more than 20%, while the price of gold has doubled.  With the price of housing included, general prices have barely moved.

  3. John Henry says

     I vote bubble. The relative value of platinum vs gold is decreasing, where the two metals have historically had relative parity.

  4. John Henry says

     I vote bubble. The relative value of platinum vs gold is decreasing, where the two metals have historically had relative parity.

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