Friday, October 19, 2012

Something Can Go Up in Price Yet Fall in Value - Chicago Gold and ...

People always ask me if I think the price of gold will go up. I reply back to them that the price of gold is not as relavent as the value of gold. Does the price of gold matter if the dollar is worth zero? Dollars are just one factor.

Not too long ago, you could exchange 1,000 dollars for one ounce of gold. Now it's about $1700 dollars for one ounce of gold.

What matters is what can gold buy in terms of something else of value. Dollars to gold exchange is just one measure of gold's value. You also compare over time how many ounces of gold you will need to buy median income family home, or a barrel of oil, or a bale of wheat, or some Apple stocks.

Source: http://neilski.typepad.com/chicago_gold_and_silver_i/2012/10/something-can-go-up-in-price-yet-fall-in-value.html

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