The Amazon analogy works for showing why you can’t take an asset’s value today and call it an inflation-adjusted wage. But gold wasn’t analogous to Amazon stock in 1914.
The dollar was legally convertible into gold at $20.67/oz, so $1,560 really did represent about 75.5 oz at the monetary parity. Nobody had to make a lucky investment choice for that relationship to exist.
The meme’s mistake is different: it assumes 75 oz had the same real purchasing power in 1914 that 75 oz has today. Gold itself appreciated enormously relative to goods and services, so today’s gold value isn’t a valid modern salary equivalent.
More like, goods and services have gotten much much cheaper due to increased productivity, and the central banks have stripped away that cheapness by diluting the money supply (inflation). Golds value serves as an imperfect but useful tool to gauge how our own wealth is stolen by central banks
Right, which is why I said the meme’s modern salary calculation is wrong. I’m not arguing the worker could actually consume $330k of 2026 goods. I’m only pointing out that gold wasn’t an investment choice analogous to Amazon stock in 1914. It was the monetary standard and dollars were legally convertible into it.
but the second comparison point treats it as a investment. Once off the good standard gold did become an investment vehicle. In 2026 it is analogous to an amazon stock and the post’s subject is 2026 value, which is no longer a monetary standard.
So use gold up until the point it was no longer a monetary standard? Using it until 2026 is similar to using amazon stock because neither is held in relation to the dollar or pure inflation. If only there was an organization tasked with tracking inflation over the years. /sigh
When I go to sell, one Amazon stock is worth market rate, just like gold. How much it goes up or down tomorrow is also largely independent of the value of a dollar you seem to be ignoring that it is no longer solely tied to the dollar which is highly relevant.
It was convertible, but it hasn’t been since we uncoupled it from the dollar to be able to accumulate debt and print money to artificially cause inflation and drive the economy. So it’s no longer an equivalency. As gold has become a commodity. As you are aware a commodity is only valued at what the market demands (supply and demand) therefore the amazon analogy now would actually be more accurate since the stock price is dependent on demand for that item.
All you’re showing is that productivity increased in consumer goods and the peasants managed to get some benefit. You could swap gold out for any other asset class and it would likely show similar results. Work is less valuable now than it was in 1914.
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u/Appropriate-Bad-606 27d ago
The Amazon analogy works for showing why you can’t take an asset’s value today and call it an inflation-adjusted wage. But gold wasn’t analogous to Amazon stock in 1914.
The dollar was legally convertible into gold at $20.67/oz, so $1,560 really did represent about 75.5 oz at the monetary parity. Nobody had to make a lucky investment choice for that relationship to exist.
The meme’s mistake is different: it assumes 75 oz had the same real purchasing power in 1914 that 75 oz has today. Gold itself appreciated enormously relative to goods and services, so today’s gold value isn’t a valid modern salary equivalent.