The Chart-Tards Return

OK, so we're going to do this again.  Really?  We're gonna go back to this business of looking at 200 year charts to try to discern relative valuations?

From MarketWatch:

In terms of 1801 purchasing power -- i.e., adjusted for inflation -- $1.00 worth of 1801 gold was then at $1.45. That was still far below gold's 1980 nominal peak, when it reached $4.26 adjusted for inflation.

But now gold has spiked again. At its Friday close of $1,118.30, an 1801 $1.00 worth of gold would be worth $3.26 in 1801 dollars. Gold is supposed to be a store of value. And in fact throughout the 19th century, its purchasing power did fluctuate in a fairly narrow range.

But the 20th century has been wild.

So is gold's second, current spike sustainable?

While we're looking at ultra-reliable pre-Civil War data, here are some other tools we may want to consult:

  • Ouija Boards
  • Rune Stones
  • Chicken Bones
  • A cracked serpent egg stirred with a witch's pinky nail
  • The alignment of Jupiter with Pluto (i bet you thought I'd say Uranus)
  • Coin Flips
  • The writings of Nostradamus
  • The drawings of CoCo the Gorilla
  • The scrawlings of the Tic Tac Toe-playing chicken in Chinatown
  • The ramblings of Harry Dent
  • The comic strip in that Bazooka Joe wrapper on the subway platform

Just some ideas, guys.  Put those through Jeremy Siegel's Wonderputer and see what it spits out.

Source:

Parsing 200 Years of Gold Trades (MarketWatch)

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