Gold Price: USD 65,000/oz in 5 years?
By BullionStar
16 June 2021 is five years from today. What will the gold price be 16 June 2021?
Currencies are Worthless
As the world’s fiat paper currencies have lost 99% or more of their purchasing power in the last 100 years, we have to understand that fiat paper currencies are not a suitable unit of account to accurately measure prices.
Gold is in fact a much better measuring stick for value than paper currencies.
A currency doesn’t measure anything. It just has an arbitrary value placed upon it by the population using it. It’s not backed by anything and it can fail at any time. By the tale of history, we know that the unbacked fiat paper currencies used today will ultimately destruct and become worthless. All unbacked fiat currencies throughout human mankind have failed.
A more accurate measurement is to measure fiat currencies in gold. If we look at the US Dollar as measured in gold, we can see that the US Dollar has utterly failed in keeping its store of value, with the value plunging about 98% in a mere 50 years.
Source: Gold Price Charts, BullionStar
When you need a stack of USD 100 bills to buy a milk and a couple of eggs, the the US Dollar gold price is meaningless as an indicator. What we have to establish when talking about the price of gold is that it keeps purchasing power constant. If 1 oz of gold coin can buy an exclusive men’s suit today at USD 1,300, and the same 1 oz gold coin buys an exclusive men’s suit at USD 2,600 tomorrow, it means that gold is still at USD 1,300 in today's purchasing power and we haven’t gained anything. Same thing if the gold price goes to USD 650 and it can still buy the same suit.
We as a society should have transcended the idea of measuring value in fiat currencies a long time ago. Currencies are not a reliable measuring stick. Just imagine if the centimeter, meter, yard or foot were to fluctuate in length.
100 cm 100 years ago has become 2 cm today. Think about it. This is what has happened with our currencies.
The Gold Price
The gold price is an interesting term because the gold price doesn’t reflect what’s happening on the physical gold market whatsoever.
In today’s marketplace, a lot of things are regarded as “gold”. On the London Gold Market alone, there’s 600 times more gold traded each day than there is gold mined globally that day.
All sorts of paper gold passes for “gold” on the financial markets. The vast majority, certainly more than 95%, and likely more than 99% of this paper gold is not backed by any physical gold.
“Gold” is created out of thin air as paper obligations. The demand and supply of this paper gold have little to do with the physical gold market.
The demand for real physical gold has been insatiable in the last couple of years but without the price of gold …read more
Source: Gold Price: USD 65,000/oz in 5 years?
