Thursday, February 09, 2012

GDP in Terms of Gold

I had previously calculated what the price of gas was had you used gold as your currency instead of US dollars. The price of oil today would be somewhere around $1.29.

I then figured, "hey, why not convert US GDP in terms of gold?"

I will admit upfront this is not a completely fair comparison in that it is more reflective of the price of gold than it is the productive ability of the US, but it is interesting to note that if we used gold as the currency, GDP today would be a mere $400 billion, about what it was when the last time the economy sucked this bad - Jimmy Carter.

I'm just waiting for the next Ronald Reagan.


Amateur Strategist said...

What if we use the price of gold before it shot up in market value? Something like the 1995-2000 price of gold?

I'm going to have to look into this.

Captain Capitalism said...

You'd have the same pattern, but different values.

I based it to 1968 when gold was allowed to trade freely again. It was (roughly) the same value adjusted for inflation as gold was in the 1995-2000 era you suggested. But by all means calculate the chart. I'd be curious too.

Amateur Strategist said...

Oh, well, yeah, it would just give the same pattern. Raw numbers are not as interesting to me as the trends that can be seen.

I thought you were using the year's price of gold for each year.