Gold hits all time high(goldprice.org) |
Gold hits all time high(goldprice.org) |
* https://watchcharts.ca/watches/price_index
* https://watchcharts.ca/watches/brand_index/rolex
* https://www.hodinkee.com/articles/used-watch-market-prices-e...
>> The value of the US dollar is simply going down.
I wonder what could be causing nervousness in the USD regime…
So it's part of the story, money losing value in the real economy. That's been happening since moving off the gold standard at roughly similar rates.
There's something that happened during ZIRP & Negative Real Interest Rate Policies that completely divorced the value of money in the real economy from the value of assets & future cash flows, and even when interest rates became positive again, the trend appears to have continued.
Perhaps all investors just believe ZIRP & Negative Real Interest Rate Policies are coming back, maybe to even more negative real rates than ever before.
How do you measure this? What is this claim founded in?
You could indeed say that inflation should be defined by the asset prices. This would couple fiat and asset prices definatorically.
I’m not sure I follow. The USD is just a medium of exchange. 100% of the dollars commands 100% of the wealth of the economy. If you increase the number of dollars but the size of the economy itself doesn’t increase then the underlying prices would go up and the value of individual dollars would go down.
I'm assuming you are referring to CPI, but that is just a single measure of inflation and serves a very specific purpose. One could argue that "real" inflation in fact is the US dollar's value relative to gold or other similar assets.
But really none of it is as objective as it tries to pretend to be.
So then the question is - how long can this continue before something snaps
This, in itself, doesn't mean anything profound. There's nothing to "snap" if the expectation of stable, modest inflation is baked into the markets. Fiat currencies usually implode only when something else undermines the confidence in the issuing government.
1) flight from USD assets given views that one cannot depend on US assets as safe havens
2) central banks increasing gold holdings
3) purchases by Chinese investors as they have few places to invest their money
4) concern around debt levels deficits and democratic process ability to fix this
5) concerns around central bank independence, and hence inflation targeting, being undermined for political motivations
I have personally bought a lot of gold after having been a long term US equities investor because of its risk-off and zero duration nature. In a world of stock bubbles, high valuations, and general economic uncertainty, leaning risk-off has been where I currently feel comfortable. In a world of inflation being in zero duration is a sensible place to be.
It was a presidential election year and consumers were getting squeezed hard by rising energy prices. Russia invaded Afghanistan, Carter suspended participation in the Olympics, and there was a general feeling of concern.
Using Wolfram Alpha to compute gold's price in 1979 relative to 2025, "850.00 1979 dollars in 2025", the result is $3,663.84
Gold closed today at $3,858.60.
Just like 1979, 2025 has a long list of international concerns making investors nervous.
Not that one should put all of one’s portfolio into gold. That would be pretty insane. But a certain fixed allocation within a balanced portfolio? I think that makes sense.
The book is highly researched and explains the pattern we're in, and what we'll see next.
https://www.amazon.com/Principles-Navigating-Big-Debt-Crises...
(not to act like im above it all, i still have my gold-plated pokemon jigglypuff trading card from burger king in 1999 and i often use golden paint on model kits).
https://www.theguardian.com/business/2025/sep/28/bullion-bon...
It is about certain regimes nearing their end and folks converting assets into something fungible they can use and enjoy while exiled in Geneva, Dubai, Phnom Penh, etc.
As just one example (of many) of why its not about the USD - most global debt is dollar denominated and settled in dollars. Even if they don't reside or transact in the US, most large financial transactions settle (or are hedged) in USD. Again, just one example.
Also, understand export economies like China cannot avoid dollar settlement for goods exported to the US. They can settle in USD and covert to another asset, but only as a secondary step.
I could go on about this, but Carnegie Endowment Prof Michael Pettis explains this and more much better than I can.
https://totalrealreturns.com/s/GLD
(Not quite the same due to the compounding 0.40%/year expense ratio of the ETF, but probably close enough for this conversation.)
Considering most stocks have been equally increasing/at ATH, I’m not sure that’s the reason.
[0] https://www.researchgate.net/figure/Global-reserve-currencie...
They all start out with "if the shit comes down, gold will --" and I cut them off by saying "-- still have almost zero intrinsic value."
Can't eat it. Can't burn it. Can't really make shelter or a weapon out of it. Useful for tiny microcircuits, but that's not something the preppers will be doing in Montanam
"Well, it'll always be valuable, because people think --"
Aha, dudebro, now you're in the realm of "perceieved value." Whole different game in the end times...
As always, Wikipedia: https://en.wikipedia.org/wiki/Gold_certificate_(United_State...
Seems like anyone who buys or sells gold at any other price is questioning it.
I keep seeing this but then I also keep seeing the opposite: https://finance.yahoo.com/news/foreigners-buying-us-stocks-r...
[1] https://www.apolloacademy.com/wp-content/uploads/2025/01/011...
- The USD is definitely losing value. That also means stocks from US companies would be cheaper from a foreigner's point of view.
- That means it represents good investment opportunity as long as the fundamentals of those companies are not affected too much (e.g. AI companies not directly affected by workers' raid, or pay tarrifs). Nothing is contradictory here.
Actually we’ve shifted into authoritarianism and confidence has only worsened.
Who is Satoshi Nakamoto? How come his Bitcoin holdings - now worth more than $100 billion dollars - have remained untouched since 2010? How can any one human resist that kind of temptation? I would be digging landfill sites if I lost my wallet worth $100 billion. The launch of Bitcoin also coincided with the 2008 financial crisis. The first block had the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" embedded, etc.
None of the altcoins have this level of myths and legend. You need this kind of supernatural story to start a new fiat, digital gold, religion, and whatever collective fiction you can think of.
It s superior to currency because while (for example) the US dollar will always have value as long as you pay taxes with it, there is not a limited supply
It is superior to bartering because while (for example) a chicken has value due to its utility as food, it naturally disappears (because you ate it or it died).
Gold and other precious metals sort of sit in the middle ground as the "next best thing" to almost everything that humans want. So it remains a useful means of preserving and communicating value.
The true value of gold is quite stable over time (since new gold is mined at a slow rate). Fiat currencies are constantly being debased. Hard assets fluctuate up and down relative to gold.
In contrast, Trump has been making noises about wanting to replace Powell as chair of the Fed, because Powell won't dance to Trump's tune. I do not want a world where Trump can determine (even if indirectly) the value of the dollar, or the interest rate, or anything in that vicinity.
So I trust the dollar a lot less than I did six months ago. In contrast, gold doesn't care what Trump's policy is.
https://www.space.com/astronomy/earth/earths-next-mini-moon-...
All the Germans who had great gold reserves in 1930 still ended up fighting in WW2. Hell, many of them were Jewish and had that gold stolen and sent to the Swiss for safekeeping by the Nazi state. The danger to their society was not hyperinflation, it was a hostile government sending them to die for stupid reasons, and literally like a hundred people, or fewer, choosing out of utter stupidity and an insane ideology based purely on ignorance, forcing everyone into a bad situation.
There is no safety, of any kind, under authoritarianism. Gold will not save you.
That useful property was well known (and notably, other currencies such as shells and precious stones lacked this). In addition as others have said, gold was both scarce and had a low melting point. However, other metals had these properties too, and sure enough, some cultures did anchor their currencies on metals other than gold.
We are not "just instinctively attracted to shiny metals". FHN.
It took 8 years for gold to recover from circa 2012 drop. 8 years is twice as long as S&P 500 took to recover from 2008 financial crisis. More importantly, see the 1980 high. It took 26 years to get back to the same point. Anyone considering investment should adjust their expectations accordingly.
As a sibling comments outlines, gold is actually quite volatile and risky versus returns, and your returns will very much depend on when you bought it.
> an ounce of gold in Roman times bought a nice suit, and today, an ounce of gold buys a nice suit.
Consequently it's the standard safe store of value investors flee to when the world is in upheaval, a role it has played since well before Roman times. Its price being high is a standard indicator of investors fearing miserable times ahead. See, for example, https://www.investopedia.com/terms/s/safe-haven.asp or https://www.investopedia.com/terms/f/flighttoquality.asp.
If it appears to you that "gold is pretty much always appreciating", that's a function of your perspective, similar to the phenomenon where, sometimes, when you're standing on railroad tracks, a faraway train looks bigger and bigger and bigger if you just stand there and watch. In this case what is happening is that the value of whatever you're using to measure the gold's value, probably dollars, is depreciating.
Gold's value is pretty volatile in the short term, though, so in fact most of the time gold is not at an all-time high, even measured in dollars. If you look at https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/F..., for example, you'll see that gold didn't reach its high of 02011 again for about 9 years, and didn't reach its high of 01980 again for 27 years, until the subprime mortgage crisis in 02007. To me it looks like the recent periods that gold has reached a nominal all-time price are roughly 01968–01975, 01979–01980, 02008–02011, the first half of 02020 when nobody knew what was going to happen with covid, and since Trump got elected. 13 out of the last 60 or so years.
The following plot on that page shows what I mean about inflation; adjusted for the BLS CPI, gold hadn't exceeded its 01980 peak until the last few months, not even in the subprime mortgage crisis.
kmeisthax's shadowbanned graph of oil barrels per gold ounce is also pretty thought-provoking: stable within the 10–35 range from 01946 until 02023, with the stunning exception of 02020 ("The peak in 2020 was driven by COVID-19, which boosted gold prices as a safe haven while oil demand and prices plummeted due to global lockdowns.") https://elements.visualcapitalist.com/visualizing-the-gold-t...
It’s backwards to blame the faults of oligarchy on democracy. The reverse would be true.
However you are quite right that political system we are living under seems incapable of righting itself. The upper class is like a parasite that doesn’t know or care if it’s killing its host.
I too would retreat to the farthest corners of the earth never to be seen again if I had misplaced 100 billion dollars.
Apparently the first popular stablecoin can't be beat either, despite its sketchy origins and a lot of bad press.
If beyond a certain point, only fame matters, it's kind of depressing from a technological innovation point of view.
That's actually not quite right. You can only buy securities on US markets with US dollars. You'd have to buy dollars on the money market to make that trade. So to the extent that "cheaper dollars" are driving investment in dollar-valued securities, they're increasing the value of the dollar on the global market by the same amount.
All markets seek toward efficiency. The situation you posit would be subject to a money-printing arbitrage loop if it actually existed.
The rich people expect a return rate regardless of how expensive the asset was, and eventually the asset will have to give that. This transaltes into more expensive consumables, rents, etc. Ie, Asset prices are a part of the real economy.
A dollar in 2025 is not worth -7 (i.e. eight times one less than one) dollars from 1970; it is worth ⅛th of a dollar from 1970.
Yes, I know what you mean. But ‘×’ is multiplication, not division — and phrases like ‘¼ less than’ and ‘3 less than’ have clear meanings inconsistent with using ‘8× less than’ to mean ‘⅛th.’
In other words, we have two different inflations happening at once, leading to people who happened to own the right assets getting richer and everyone else getting poorer. I don't think that's what an efficient market would do, which implies that efficiency will kick in at some point and BOOM
Have a look at the CPI-adjusted gold chart, and think back to how awful things were (or weren't) in 2011.
CPI is just an index of consumer prices. It's like saying that we have two stock markets because Nvidia is going up faster than Costco.
> People who happened to own the right assets getting richer and everyone else getting poorer
It's not a zero-sum game. Almost everyone is more wealthy than their peers 30-40 years ago.
Wealth disparities widen, but the reasons for this are complex and go beyond inflation. And frankly, many of them are self-inflicted. Every single housing development in my neighborhood is thoroughly protested by everyone. And most of what my city officials do is inventing new rules and regulations. They're not working for big corporations or the federal government.
> I don't think that's what an efficient market would do
Sounds like you spotted an arbitrage opportunity?
Real world economic policy works by virtue of steady hands and rigorously applied norms, not goofball trickery around edge cases of ancient laws.
[1] The idea that the Treasury's statutory authority to mint coinage could be exploited to mint a single illiquid-by-virtue-of-size asset that could then be borrowed against without increasing the debt ceiling.
The fact they they kept the price fixed should serve as a reminder they can do this at any time. There is no conspiracy theory, they've literally done this and nobody challenged them and no laws have changed since then (thus the "ancient law" that is somehow still in effect). The sophisticated economists that study "real world economic policy works by virtue of steady hands and rigorously applied norms" can make another "ancient law" any time they want.
We're done, this will be my last comment.
this really can't keep going on forever. the weekly "ATH" and everything going up is like a pressure bomb that keeps getting pressurized more and more each day.
And because this is all assets, the more assets you already have, the more you gain. And the central banks/etc. will make sure the party keeps on going for you.
Central banks could reduce their balance sheets significantly more (and until recently the pace was pretty quick), but given where things are today it will undoubtedly be pretty politically unpalatable to do so (bond markets puking, making deficits even worse in the face of an inability to cut spending).
Easier said than done, I think.
The real economy isn't.
Apparently consumables have become incredibly cheap.
But then again, consumables will like start to rise in price now people need more money to buy a house, etc.
You could also say that real salaries have gone down a lot, which is probably also true.
These effects have to go through very complex value chains.
Just looking the number of dollars, without looking at what they're doing, is like thinking you will gain weight because your fridge/pantry is stocked:
> But also – why do so many people insist that inflation is an increase in the money supply? This makes zero sense. Here’s why – our economy is mostly a credit based economy. So, if I take out a loan for $100,000 then the money supply has technically increased by $100,000. But what if I don’t actually tap that loan? What if I borrow the money because, for instance, house prices just went up 25% and I want to have some cash around for emergencies? This doesn’t tell us anything about prices, living standards or really anything. But this is what so much of the money supply represents – money that has been issued and is just sitting around unused. Why is this useful? It’s like calculating your weight changes by counting how much food you have in your refrigerator. No. That’s potential calories consumed and potential weight gain. The amount of food in your fridge tells you little about your future weight changes just like the amount of money in the economy tells us little about the actual price changes in the economy.
* https://www.pragcap.com/three-things-i-think-i-think-i-see-d...
Japan had an ever increasing money supply for decades and experience not just low inflation, but at times deflation:
* https://fred.stlouisfed.org/graph/?g=1680i
See also US:
* https://fred.stlouisfed.org/graph/?g=1MG9e
Besides the quantity of money, you have to actually look at what the money is doing (velocity), which in recent years is 'not much':
* https://en.wikipedia.org/wiki/Velocity_of_money
* https://fred.stlouisfed.org/series/M2V
As it stands there's just a growing pile of US money doing a whole lot of nothing in money market funds:
* https://www.cnbc.com/2025/09/12/7-trillion-cash-money-market...
* https://www.apolloacademy.com/6-trillion-on-the-sidelines-in...
Money has no value except in what it can buy you, the most important of which are shelter, water, and food for survival. After that you get into what can help you achieve happiness / fulfillment.
As a percentage of household spending, food (even with recent risen prices) have never been lower:
* https://www.npr.org/sections/thesalt/2015/03/02/389578089/yo...
and clothing:
* https://www.bls.gov/opub/ted/2006/may/wk5/art02.htm
* https://www.aei.org/carpe-diem/as-a-share-of-household-spend...
We've never lived longer, with fewer diseases, and had an easier (and safer) time to travel.
Sadly shelter (especially if you want to buy) has gotten more expensive (at least in the Anglo-sphere), but that's more about things like zoning policy and such rather than money supply.
So what exactly has dropped in "value" in human life/lives with the increased amount of money that's supposedly bouncing around? When in human history have things been better? If you could jump in a time machine that goes 88 mph, what period of history would you rather be in to live your life?
https://onlydinosaurs.com/realistic-gorilla-animal-costume-f...
The reason why money printing doesn't immediately translate into lowered dollar value (and thus, higher gold prices) is that other goods and services are getting cheaper around it. If supply is flexible then the price of some goods won't change much, while things with fixed supply will skyrocket in price. That's why we basically didn't see much inflation in the 2010s despite printing shittons of money and having a zero-interest rate policy for most of it. All that money went straight into equities and real estate.
Likewise, there are also goods like oil that are part of basically every supply chain, so when the price of oil goes up, the price of everything goes up. Owning gold will not hedge against this kind of inflation. "BuT tHe SuPpLy Of GoLd Is FiXeD!" you say. Yes, but oil has something stronger than a fixed supply: centralized supply. Every oil producing nation in the world is part of a large supply-restricting cartel that has proven to be frustratingly resilient to all the usual things that are supposed to break cartels. They even managed to bring American shale oil producers to heel (because fracking is too expensive to be economic in a cheap oil environment).
As a result, the ratio of gold to oil prices is very volatile[0], way moreso than you'd expect from something sold as an inflation hedge. Because, with few exceptions, everything in the economy runs off oil, you'd expect to see either a fixed line (if oil is as fixed as gold) or a rising line (if oil grows like dollars). Instead we see ups and downs everywhere.
[0] Apologies for the infographic spam, but this was the easiest chart to find: https://elements.visualcapitalist.com/visualizing-the-gold-t...
Funny how this "long now" date format will stop working in 99999, but the normal way of writing years as integers will keep working just fine.
Maybe more like twelve thousand years from the beginning: https://en.wikipedia.org/wiki/G%C3%B6bekli_Tepe. The real crucial question is whether we're two years from the end of civilization or two trillion.
Knock off purple is cheap, as are machine stitched fabrics .. neither pass the eye of those who judge such things though.
https://imperiumromanum.pl/en/curiosities/sumptuariae-leges-...
Despite Sumptuary law's then it was often the case, as it is now, that anyone who cared to spend the money could become a magistrate and wear a stripe of purple, or spend more money to overthrow a ruler and replace them .. going full purple.
Wearing purple signified not only that you could afford purple, it also signified you could bribe censors to allow you to wear purple.
Much like having the latest model of a limited edition sports car today; not only can you afford the car but you can also afford enough shittier models to be moved up the preferred buyer list or otherwise bribe the sales reps.
