Supporters of the gold standard because of gold's stability should look at this plot of the real price of gold over the last hundred years. In the last hundred years, the price of gold has fluctuated a lot, sometimes very fast and unpredictably.
More about long term commodity prices here. Thanks to Institutional Economics.
1 comment:
Gold does the opposite of the economy. So when stuff is going well, gold becomes less valuable, and when stuff is going bad, gold becomes more valuable. So even though it's not stable as it were, the point is, it stabilizes your investments overall by performing well when nothing else is performing well. Also, note that the oil shocks coincided with the end of the Bretton Woods system, both of which caused the value of gold to increase greatly in value.
Post a Comment