Recently some reports have
questioned gold’s value. To fully appreciate the metal’s place in your savings, here’s some perspective, with an interesting way to look at it …
Is gold’s current price of around $1,100 reasonable, too high or too low? In an article on Business Insider, Bill Bonner tackles this
question by taking us on a trip through history. For comparison, he uses one of the most iconic American brands of the last century: Ford vehicles.
Around 1910, Henry Ford revolutionized the automotive world by releasing an affordable, yet efficient car – the Model T. Part of plavix cost the vehicle’s appeal was that it made no compromises in terms of quality while being reasonably priced. In fact, it was better than anything that was currently on the market, and it cost only $260 – a price most with a steady job could afford. How does this help us gain insight on whether gold’s current price is sensible?
Today, the Model T would cost somewhere between $5,200 to 13,000. Ford’s Fusion S, today’s everyman car, costs $22,000 – 85 times more than the Model T in gold terms. Yet in dollar terms, gold is worth 58 times more than what it was 1915 – if gold clomid gas bloating prices rose in accordance with car prices, today’s price per ounce would be $1,615.
In those days, the price of gold was $19 per ounce. If we divide the price of today’s Fusion S with 13.7 (the amount of ounces it took to buy the Model T), we reach a gold price of $1,605 – that is, had the prices of gold kept up.
Ford also sparked a revolution in terms of wages with his announcement that the minimum daily salary would be $5 – double than the average of that time. These days, most autoworkers will earn $73 an hour or clomid for sale $654 a day, including benefits. Four days of work today will buy the autoworker two ounces of gold, whereas in the 1910s he would only get one for the same amount of labor. Had gold prices kept their pace with United Automobile Workers union wages, today’s ounce of gold would cost around $2,485.
Bonner lets the reader draw conclusions: “Is gold too high? Too low? Who knows? But we wouldn’t worry about it.”
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photo credit: 1969 Cadillac DeVille Convertible/ Tag Sale in Meriden, CT via photopin (license)