In 1935, the official price of one gold ounce was $20.67. Today it’s around $1,770.
Price of gold 1935 vs. 2020
What happened?
The ounce of gold didn’t change. One troy ounce of gold still weighs one troy ounce.
One ounce in 1935 is still one ounce in 2020
What changed is the number of dollars it takes to buy one gold ounce. That stack on the left might look big compared to the paltry $20.67 on the right. It’s going to get a lot bigger.
The chart below shows the price of gold going back to early last century. The tiny blip in 1935 was a 69% increase in price at the time. It’s barely noticeable today.
Likewise, a $100 move in the price of gold will someday look like a tiny blip. Don’t let an endless stream of media panics distract you from what’s really going on. That stack of dollars can grow infinitely.
As the stack of cash grows, gold stays the same. Double the number of dollars needed to buy an ounce of gold and the ounce stays the same. It’s the dollar that’s worth less.
Consider this. $1,000 was a lot of money in the early 1900s. If an ancestor of yours had put $1,000 worth of cash away for you, today, it would barely pay for one month of rent at a downmarket apartment. Back then, it was a large sum of money.
However, if your ancestor had put $1,000 worth of gold into an envelope for you, it’s worth more than $80,000 today.
There’s a war against your wealth. The dollars you use to measure the wealth haven’t held up over time. Gold has.
With the U.S. government set to run a record deficit of $3.7 trillion in 2020, according its own CBO (Congressional Budget Office), it may soon take even more dollars to buy the one gold ounce.
- Source, Silver Bear Cafe
