> The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
How are you measuring it? It's a circular argument if you measure it in dollars. If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
> [1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, etc.
Gold is simply a good that's impossible to mass produce with technology. Use land, housing, healthcare, education or whatever you feel is most representative. Using toothpaste and tv's for CPI is a bad measurement in the last 50 years, our technology for mass producing them has lowered the true cost.
(1) https://educationdata.org/average-cost-of-college-by-year
(2) https://www.in2013dollars.com/Medical-care/price-inflation
(3) https://fred.stlouisfed.org/series/ASPUS
(4) https://www.statista.com/statistics/196400/average-value-of-...
Measure it in houses built, cars sold, concrete poured, steel refined, restaurant visits, number of people working in service industries. Measure it in color televisions and washing machines and computers sold and movies made, and the mountains of disposable crap that everyone fills their homes with. Or by looking at the skyline in Beijing in 1970, and today. The dollar is the currency of global trade, you have to print more of it to keep track with the global economy, just to prevent it from becoming a deflationary currency.
It may not less obvious if you live in the United States, but we make and consume more useful goods and services, much faster than we mine gold. That's why the cost of an ounce of gold can grow 35 times, while the cost of a loaf of bread can grow 5 times in the past 50 years.
> If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
Why not? The world's economy has grown by around that much in real value (Denominated in goods, not dollars) added in 50 years. [1]
> Use land, housing, healthcare, education or whatever you feel is most representative.
Land is speculative, you don't make more of it when the economy grows, and its price trends towards 1 divided by the interest rate. In a world of zero-interest, it trends towards infinity. A modern house requires a lot more economic inputs to go into it than a 1970s house. Likewise, the amount of waste and work that goes into healthcare, education, etc, has significantly increased over that same time period.
A better metric would be median wages, compared to productivity growth. Median family income in the US in 1970 was $9,870/year. Median family income today is ~$78,000. If there was zero productivity gain, and zero quality-of-life increases/decreases, this will tell us that a dollar today is worth ~8x less than a dollar back then.
But we have had productivity and quality of life increases. And you have to divide that 8x by whatever those multipliers were.
Gold is the weird outlier when it comes to the value of things, not the gold standard.
[1] It's grown about 35x, when denominated in dollars. If we actually used gold for money, it would have been deflationary, to the tune of... Whatever real economic growth the world would have had. That amount of deflation would have been utterly horrifying.
The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
> When we look at prices of things like education, housing, and healthcare, the 45x number makes a lot more sense. Education has 30x in price over the same time period (2).
The same amount of education isn't actually 30x more expensive.
Because you're not getting the same services in exchange for your money today, as you were 50 years ago.
If you drop the money-pit sports programs, the entirety of the administrative sector, the nice new dorm buildings, and account for reduction in public funding, you'll find that the growth in the cost of education is much closer to the cost of inflation.
It's not all that expensive, even in 2022, to stuff a group of young adults into a lecture hall and have an underpaid adjunct who doesn't even get health insurance read off Powerpoint slides to them for 15 hours a week. It's the everything else, most of which has nothing to do with education that costs money.
[1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, NFTs, shitcoins, etc.