The Price of Gas Has Barely Changed in 74 years!

Hard to believe? I'll prove it. The trick is to compare it to the value of gold versus I.O.U money. Gold used to be our currency/money. Dollar bills were just a convenient way to carry gold. Each note said "Gold Certificate" meaning that you could exchange it for that amount in gold.

Until 1934, one U.S. Dollar was equal and exchangeable for 1.67 grams of gold held in our national treasury. To restrict private citizen’s access to gold during the depression, Roosevelt took the U.S. off of the gold standard, replacing "Gold Certificate" with “Federal Reserve Note” and backed by the U.S. Government’s “promise to pay”. (The latter taken from blm.gov in their education section about gold.)

President Nixon is often said to have taken us off of the gold standard but that’s wrong. After WWII, The United States “fixed” the dollar at $35 per ounce of gold. You still couldn’t exchange a dollar for gold from the treasury, but the price was fixed. In 1971 President Nixon floated the dollar.

In 1934 when the U.S. went to fiat (I.O.U.) money, the Dow was around $100.

In 1971 when Nixon floated the dollar, the Dow was around $900
Today, the Dow is just above $10,200

Using just those indicators, since we went to “backed by the Federal government’s Promise to pay” money created by the Federal Reserve, today’s dollar has lost a little more than 99% of its value.

Let’s see how that stacks up against non subsidized prices

Average Cost of	1934	1971	2008
New House	$5,970.00	$25,250.00	$300,000.00
Home Rental/Month	$20.00	$150.00	$1,500.00
Gallon of Gas	$0.10	$0.40	$3.61
Gold/Troy Ounce	$35.00	$40.62	$894.00

Now let's look at average wages.

Average	1934	1971	2008
Annual Wage	$1,600	$10,600.00	$56,194.00

Since 1934


New homes have gone up 5,000%


Rent has gone up 7,500%


Gasoline has gone up 3,600%


And wages have gone up only 3,500%

Now let's compare the same things but using the cost in ounces of gold.
I calculated it by dividing the price for each item by the price of gold per troy ounce that year. So the following is in ounces of gold rounded to 3 decimal places.

Average	1934	1971	2008
New House	170.571	621.615	335.570
Home Rental/Month	0.571	3.693	1.678
Gallon of Gas	0.003	0.010	0.004
Wage	45.714	260.955	62.857

1971 shows the massive inflation that President Nixon had to handle.

Over all, the cost of things in gold ounces has stayed pretty close, ranging from a gallon of gas being almost the same, to a new house going up 100% to rent going up 293%. Wages only went up 50%.

It looks to me like gold is certainly much more stable in buying power over the past 74 years than the dollar.

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Economy, Financial, Gas Prices, Government