{"id":36146,"date":"2018-07-21T12:05:09","date_gmt":"2018-07-21T17:05:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36146"},"modified":"2018-07-21T12:05:09","modified_gmt":"2018-07-21T17:05:09","slug":"the-case-for-gold-is-not-about-price","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36146","title":{"rendered":"The Case For Gold Is Not About Price"},"content":{"rendered":"

The Case For Gold Is Not About Price<\/a><\/h3>\n\"Gold\"<\/picture>\n
\n

Between the years 1971 and 2011, the price of gold went from $42.00 per ounce to $1900.00 per ounce \u2013 a forty-five-fold increase. This is depicted on the chart below\u2026<\/p>\n

<\/a><\/p>\n

(Click to enlarge)<\/p>\n

Looking at the chart, it would appear that gold is in a long-term bull market and that continually higher prices over time can be expected. Proponents of this approach to gold cite fundamentals such as a weakening U.S. dollar, social unrest, wars (combat and trade), political instability, etc.<\/p>\n

And the numbers seem to bear this out. For the forty-year period between August 1971 and August 2011, the price of gold was up forty-four hundred percent.<\/p>\n

But are we really making any money? The chart below paints a clearer picture\u2026<\/p>\n

<\/a><\/p>\n

(Click to enlarge)<\/p>\n

The inflation-adjusted chart immediately above seems to support a severely modified view of gold from that which we mentioned earlier. Rather than long-term, ever-higher, onward and upward, we see strictly defined periods of extreme volatility. Indeed, it appears almost cyclical.<\/p>\n

And our previous total return of 4,400 percent for the forty-year period August 1971 to August 2011, is reduced to 900 percent. Even so, that is the equivalent of a 6% average annual return, net of inflation. Which is huge.<\/p>\n

(In case you are interested, the average annual return for the S&P 500 \u2013\u00a0with dividends reinvested \u2013\u00a0<\/em>for the same exact time period, is 5.13 percent. That relatively small differential on an annual basis is magnified considerably when you compare cumulative total returns: Gold at 900% vs. S&P 500 at 639%)<\/p>\n

So, does the nine hundred percent total return\/6% annual return represent a profit? \u00a0Yes, most definitely. Net of the effects of inflation, the price of gold increased ten-fold; all of which represents added\u00a0value.\u00a0<\/em>Here\u2019s why\u2026<\/p>\n

In 1971, the cost for one loaf of bread was $.24. The average cost for one gallon of gasoline was $.36. With gold at $42.00 per ounce, you could purchase one hundred<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Case For Gold Is Not About Price Between the years 1971 and 2011, the price of gold went from $42.00 per ounce to $1900.00 per ounce \u2013 a forty-five-fold increase. This is depicted on the chart below\u2026 (Click to enlarge) Looking at the chart, it would appear that gold is in a long-term bull […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[374,20960,20961],"class_list":["post-36146","post","type-post","status-publish","format-standard","hentry","category-economics","tag-gold","tag-kelsey-williams","tag-safehaven-com"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36146"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36146\/revisions"}],"predecessor-version":[{"id":36147,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36146\/revisions\/36147"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}