How much would a house and car cost on the gold standard?

[denison]

Does anyone know?

[torchbearer]

today or when we last had gold as money?

[Dr.3D]

today or when we last had gold as money?

Excellent question!

We would also have to know how valuable gold would suddenly be if we returned to a gold standard.

[denison]

today or when we last had gold as money?

I'm mean today. Lets say we could somehow go back to the gold standard, what would it cost in 2009?

[denison]

Excellent question!

We would also have to know how valuable gold would suddenly be if we returned to a gold standard.

Yeah, lets say fort knox and the fed didn't exist and all the gold was on the market. No manipulations, no fractional reserve banking etc...

[ctiger2]

Well, a "Gold Standard" means that you set a certain price for 1 oz of Gold and then you base the paper currency on that fixed price or "Gold standard". If you mean if they would have never removed the Gold Standard, then you could take for instance the 1 oz Gold = $20 USD Gold standard. That would mean that since 1 oz Gold = $1,000 USD in today's money a new $20K car would cost 20 oz of Gold. 20 oz of Gold at $20 per oz puts that same car at $400 on the 1 oz Gold = $20 USD Gold standard. See how Gold has retained it's purchasing power while the paper fiat currency lost it's purchasing power? That purchasing power loss is the central banks stealing the wealth of the people by inflating the currency. Follow the yellow brick road...

[forsmant]

Well, based on dollar to gold ounce conversion of today, a 200,000$ house would cost 200 Gold ounces.

[Dr.3D]

Yeah, lets say fort knox and the fed didn't exist and all the gold was on the market. No manipulations, no fractional reserve banking etc...

Well, then we would have to some how figure out what the real price of gold should be. From what I've learned, the price of gold has been artificially suppressed for quite some time.

[torchbearer]

I'm mean today. Lets say we could somehow go back to the gold standard, what would it cost in 2009?

so, you'd want to asked how much is gold worth in relation to the car.
you'd have to ask, what kind of car?
all cars have different values.

[ctiger2]

Well, then we would have to some how figure out what the real price of gold should be. From what I've learned, the price of gold has been artificially suppressed for quite some time.

True, there would have to be a reevaluation of the Gold price for sure. Based upon inflation only, Gold should be around $2300 per oz right now. Now, if you wanted to back the USD with Gold you'd have to figure out a price that all the Gold in the US possession could soak up all those paper dollars out there. I've heard that Gold might have to goto $10-$20K per oz to do it. If Fort Knox is empty like many believe, Gold might have to goto $100K + per oz to do it. Who knows... One thing for sure though, no matter how much Gold the US has, we have enough to go on a true Gold Standard. The price of Gold will just have to go much higher to be able to absorb the paper. Gold can do it and American citizens should all want it because it gets the central banks out of our pockets. That's why they loathe Gold. It makes it much harder for them to steal from us.

[pcosmar]

Well, then we would have to some how figure out what the real price of gold should be. From what I've learned, the price of gold has been artificially suppressed for quite some time.

You are looking at the arbitrary value of the Dollar to determine the worth of gold?
The Dollar is only "worth"a small% of face value.

Gold is gold. It has worth. The dollar is only worth whatever,,,

At least in my understanding. The mental acrobatics used by our " system" give me a headache.

[morran]

Well, based on dollar to gold ounce conversion of today, a 200,000$ house would cost 200 Gold ounces.

Yeah, but the value of gold would rise if it were used as a medium of exchange. With gold as money, I'd guess way below 100 ounces. Does anyone have records of housing prices before 1940 or something? Or from a time when the U.S didn't have a central bank or price fixing in metals? Has such a period even existed (I don't know U.S monetary history)?

[Dr.3D]

You are looking at the arbitrary value of the Dollar to determine the worth of gold?
The Dollar is only "worth"a small% of face value.

Gold is gold. It has worth. The dollar is only worth whatever,,,

At least in my understanding. The mental acrobatics used by our " system" give me a headache.

Not what I was saying at all. What I am pointing at is that there has been placed an artificial value on gold. People look at the value of gold in U.S. Dollars. Doing so, causes a lot of problems when we are trying to determine the real value of gold.

We can't just arbitrarily say gold is worth $1000 per ounce. It means nothing.

[forsmant]

Yeah, but the value of gold would rise if it were used as a medium of exchange. With gold as money, I'd guess way below 100 ounces. Does anyone have records of housing prices before 1940 or something? Or from a time when the U.S didn't have a central bank or price fixing in metals? Has such a period even existed (I don't know U.S monetary history)?

But you are just guessing. It is hard to determine what the value of gold would be if it were to be exchanged as money again. What we do know is that it would probably be more valuable than it is today. And today it is worth about $1000 per ounce.

[morran]

But you are just guessing. It is hard to determine what the value of gold would be if it were to be exchanged as money again. What we do know is that it would probably be more valuable than it is today. And today it is worth about $1000 per ounce.

Yup, it was a semi-arbitrary guess. That's why I asked if anyone knew of any historic records which could at least give a rough idea of the barbaric relic's value when it was used as money. It would 100% surely be worth more than 1049.2 today's USD. Using it as a medium of exchange would increase it's demand quite a bit. Right now yellow metal is used as a hedge against inflation, and for small cosmetic and industrial uses.

[denison]

so, you'd want to asked how much is gold worth in relation to the car.
you'd have to ask, what kind of car?
all cars have different values.

a honda accord 2000 edition, is that specific enough. Lol :D
http://www.theautochannel.com/news/2006/11/13/028477.1-lg.jpg

Anyway I think I know the answer.

[torchbearer]

a honda accord 2000 edition, is that specific enough. Lol :D
http://www.theautochannel.com/news/2006/11/13/028477.1-lg.jpg

Anyway I think I know the answer.

I'd give you 5 ounces for that car.

[pcosmar]

But you are just guessing. It is hard to determine what the value of gold would be if it were to be exchanged as money again. What we do know is that it would probably be more valuable than it is today. And today it is worth about $1000 per ounce.

That seems to only point out that the value of the dollar has changed.

[denison]

Well, a "Gold Standard" means that you set a certain price for 1 oz of Gold and then you base the paper currency on that fixed price or "Gold standard". If you mean if they would have never removed the Gold Standard, then you could take for instance the 1 oz Gold = $20 USD Gold standard. That would mean that since 1 oz Gold = $1,000 USD in today's money a new $20K car would cost 20 oz of Gold. 20 oz of Gold at $20 per oz puts that same car at $400 on the 1 oz Gold = $20 USD Gold standard. See how Gold has retained it's purchasing power while the paper fiat currency lost it's purchasing power? That purchasing power loss is the central banks stealing the wealth of the people by inflating the currency. Follow the yellow brick road...

Quoted for truth. Thank for the summary. I'm in favor a gold standard with allowance for competition in currency. I think most people would choice gold in the end.

[denison]

I'd give you 5 ounces for that car.

can I get that by paypal? ;)

that was about my guess. thanks.

[forsmant]

That seems to only point out that the value of the dollar has changed.

All value is subjective and therefore changes with moods and how much the women folk spend.

[torchbearer]

can I get that by paypal? ;)

that was about my guess. thanks.

the point is.. the market will decide the value.
what each of us would voluntarily give for each item, compared to what each seller would accept for their items.

[Dr.3D]

The value of gold would probably have to raise with the population of those using it as money.
So a big part of calculating the value of gold would be by figuring out what the world population was when it was used as money and what the population is now.

Seems logical that the more people there are, the less gold each one of them gets to have, thus the value of the gold would become greater.

[denison]

the point is.. the market will decide the value.
what each of us would voluntarily give for each item, compared to what each seller would accept for their items.

I get that...thanks

[ctiger2]

One fallacy I always read about regarding a Gold Standard is that consumers would have to go around with Gold to buy stuff. That's just not the case. Now, you could if you wanted to. However, if you were to go on a Gold Standard of 1oz = $1000 USD then banks would issue paper Gold certificates in denominations that would be used in cash transactions or even redeemable in their Gold value if you so choose. The point of the Gold Standard is to keep the monetary system honest.

[Dr.3D]

One fallacy I always read about regarding a Gold Standard is that consumers would have to go around with Gold to buy stuff. That's just not the case. Now, you could if you wanted to. However, if you were to go on a Gold Standard of 1oz = $1000 USD then banks would issue paper Gold certificates in denominations that would be used in cash transactions or even redeemable in their Gold value if you so choose. The point of the Gold Standard is to keep the monetary system honest.
Then the problem would be to keep those printing the certificates honest.

[denison]

One fallacy I always read about regarding a Gold Standard is that consumers would have to go around with Gold to buy stuff. That's just not the case. Now, you could if you wanted to. However, if you were to go on a Gold Standard of 1oz = $1000 USD then banks would issue paper Gold certificates in denominations that would be used in cash transactions or even redeemable in their Gold value if you so choose. The point of the Gold Standard is to keep the monetary system honest.

I think if you're gonna use gold certificates, that can be inflated like any paper currency, you need to allow competition in currency. A government run gold standard can have the same disastrous effects as the fiat system.

[denison]

Then the problem would be to keep those printing the certificates honest.

competing currencies could do that. no government monopoly in money production. hehe. :D

[stilltrying]

from my understanding of the gold standard is that the bread butter and all the other household items would have remained relatively close to the same price for a long long time and that your big ticket items would take a while to save up for but with all the savings from the now expensive household items who knows how much or how long it would take to buy a car or house.

[Zippyjuan]

Not sure where I am going with this yet.
The US has a reported 8,134 tonnes of gold reserves - converted to troy ounces (32,150 ounces per tonne or metric ton) gives 261,508,100 ounces. 305 milliion people. That comes to 0.85 ounces a person. If we have our money supply based on $1000 an ounce, then you get $850 a person. In dollars, that would make for some considerably lower numbers for cars and houses. But remember, you won't have a median income of $60,000 or whatever it is now either. Try knocking a couple zeros off of that.

If we go by current money measures and take M2 (since the Fed no longer reports the broader M3 money supply) of a reported $8.2 trillion as of September http://www.federalreserve.gov/releases/h6/Current/ and make that valued at the amount of gold reserves, the price of gold would have to be $31,297 an ounce to support that supply of money (it would be even higher if you include M3). Since this is where we are now, it would not change the dollar price of cars or homes but it would have a major impact on the price of gold. In terms of gold, the home would be quite cheap- meadian home price in the West is about $220,000 so that would come out to about seven ounces. http://www.realestateabc.com/outlook/overall.htm

[newbitech]

Basically, this is how I would figure it out.
How much time does it cost to get the car from raw material to final product divided by how much time does it cost to get the gold from raw material to tradeable gold. This value is dependent on the cost of labor. Obviously the cost of labor cannot exceed the total cost of either producing a car or producing the amount of gold required to purchase the car, assuming we are paying for labor in gold (or cars). It would boil down to what percentage of gold that you will dig up do you get to keep? This is true regardless if you own the land the gold is on. You will always be limited to how much gold you can dig up from your land regardless of how efficient you are doing it (assuming your land has enough raw gold to make it worthwhile to dig up on your own land). Clearly the more efficient you are with your own land, the more cars you will eventually be able to produce (or own)


M = total time it takes to gather raw material to make the car
eM = labor cost per hour
R = total time it takes to refine raw material to make the car
eR= labor cost per hour
A = total time it takes to assemble the refined materials to make the car
eA = labor cost per hour
cC = Cost of Car

G = total time it takes to gather raw materials for tradeable gold
eG = labor cost per hour
GR = total time it takes to refine raw materials for tradeable gold
eGR = labor cost per hour
cG = Cost of gold

cC = M*eM+R*eR+A*eA
cG = G*eG+GR*eGR

cC/cG

[Southron]

You also have to remember that car and house prices are currently inflated because of easy credit. How many people do you know who pay cash for brand new cars and houses? Because of that it would be really hard to predict any prices in gold.