S&P500 Priced in Gold

by jcartw • 7 months ago

51 51 7 months ago

xeckr2• 7 months ago

Economic stagnation for over a decade? Aligns with the vibes, IMO.

stephen_g• 7 months ago

Gold is just one of many commodities these days, mostly unconnected from most monetary systems for many decades. Treating it as the benchmark of value is really quite arbitrary, and I expect someone could compare the S&P to other random commodities and come up with completely different conclusions...

xeckr2• 7 months ago

I'd definitely be curious to see the S&P valued in different commodities over time. With that said, gold certainly feels like a special indicator given its history as a universally recognized store of value.

OutOfHere3• 7 months ago

Not really. Gold is not a random commodity. It is historically the primary compact store of value, only recently to meet competition with Bitcoin.

stego-tech• 7 months ago

I mean, yeah, but the parallels OP is drawing really kinda feel like the lingering whispers of the “gold standard” crowd rather than anything more substantial.

For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands.

Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.

syntaxing• 7 months ago

What does this mean? That the valuation of dollar dropped as much as the SP500 growth?

knocte• 7 months ago

Yes

AnimalMuppet• 7 months ago

No. Very much no. It means that gold does not have a stable value, and using it as the yardstick to measure the value of other things just leads to confusion.

sebmellen2• 7 months ago

I’d be interested to see a similar chart for silver.

sebmellen2• 7 months ago

This is a very interesting chart but I can't figure out if it takes compounding into account or not.

FreeTrade2• 7 months ago

Yes, these charts keep popping up on my Twitter and it's always difficult to know what they are really measuring.

vessenes2• 7 months ago

It’s just s&p 500 index value divided by gold to get a “gold native” number. The compounding represented here would be the growth of the companies that has been “compounded” as a result of their internal investment

hdgvhicv• 7 months ago

It’s ignoring S&P dividends which add a significant amount.

S&P on its own is up 20 fold since 1990

SP500TR Is up 40 fold.

hnburnsy2• 7 months ago

Totally misleading, S&P with dividends reinvested blows away gold since 1950 or 1971.

S&P 500 Investment (with Dividends Reinvested) Historical data shows that $10,000 invested in the S&P 500 at the start of 1950, with all dividends reinvested, would grow to approximately $3,836,763 by the end of 2025.

Gold provided pure price appreciation (no yield or dividends). The multiplier is about 124.7× ($4,360 ÷ $35), or an annualized return of roughly 6.8% over 75 years.

Ounces purchased in 1950: $10,000 ÷ $35/oz ≈ 285.71 ounces

Current value: 285.71 oz × $4,360/oz ≈ $1,246,700

FreeTrade2• 7 months ago

And to be extra fair, we might want to subtract tax from those dividends before reinvestment.

lostlogin• 7 months ago

Storing that gold most cost something too.

icegreentea2• 7 months ago

The point of this entire website isn't about gold vs equity as an investment, it's about gold vs fiat currency as a superior measurement of value.

https://pricedingold.com/about/

ajross5• 7 months ago

As a "measurement of value" they both suck. Gold is (extremely) volatile and currency inflates.

Well, you can't do much to correct for the speculation noise in gold. But maybe we can attack from the other side. Maybe we could record prices for various representative products in a giant data set somewhere and calculate and record, I dunno, a "price index" that normalizes the prices to a value that is stable over time.

I bet people would pay good money to look at a chart like that. Maybe we could find one.

fdr3• 7 months ago

It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s.

I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems.

I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them.

See https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus...

netbioserror• 7 months ago

Great! We can start trading with each other in stock notes. I can't wait to buy my next round of groceries with a 0.1 SPY note! The ones I don't use will pay dividends!

aaronblohowiak• 7 months ago

you're joking, but this is basically what it means to be retired...

cykros3• 7 months ago

If only there were a digital asset that had a fixed supply to prevent inflation that nobody could control who could spend what (to avoid unjust debanking) which was highly divisible so that you could spend large or small amounts, and because it's digital it could be spent very rapidly across long distances using the magic of the Internet. And if only it's governance model wasn't subject to the corruption seen in governments and private banks alike.

I bet that thing would be a pretty useful monetary tool, even if it were attacked, as one might expect by all of the government and banks around the world who were trying to cling to the power they have by virtue of having captured the ability to print money and use it when it is most valuable, fresh off the press.

kazinator• 7 months ago

Gold provided pure price appreciation (no yield or dividends).

Who's your alchemist? Get a better one.

xnx• 7 months ago

What is the point of this chart? It would make more sense to price in terms of hamburgers or any other reasonably consistent item of real consistent value/utility.

wmf• 7 months ago

The site is trying to find evidence for retvrning to the gold standard.

therobots927• 7 months ago

Now do it compared to the median home value.

hnburnsy2• 7 months ago

Gold has 100x while median homes values have 15-20x since 1971.

foxglacier• 7 months ago

I sometimes wonder if we should be measuring money in some other unit besides dollar/etc. to reveal inflation. We could report bank balances and wages that way so the effect of inflation is obvious instead of being a trick to silently steal money off people. But it's tricky because there's no natural measure of inflation. Gold seems like a good idea in a way but I don't understand enough to know.

cykros3• 7 months ago

The issue is that broad money isn't money. It's credit. And measuring credit is like measuring both velocity and position at the same time.

The Fed tried to measure dollar supply globally for decades before giving up as they finally got their heads around how the Eurodollar network works, and they've kept somewhat quiet about the fact that they're just not actually at the center of it.

omoikane• 7 months ago

I wonder if this was a 2013 article that linked to live updating charts (with data from 2025) since there are Google+ and Twitter buttons at the end, and two 2013 timestamps below those.

maerF0x02• 7 months ago

It's tricky because it's unclear if the S&P500 will halve (Market pessimism), or if Gold price will double (currency devaluation)...

I need to see both of them priced in loaves of bread.

aurareturn• 7 months ago

If currency devalue, S&P500 would go up since equities will hold value better than cash.

alecco• 7 months ago

It's way more complex. Technology is driving deflation even for equities as extraction and refinement becomes cheaper.

But the worst is mass migration an the bulge of the world population pyramid entering working age [1]. Labor costs down for corporations and our wages evaporate. Compound with AI and automation.

I think the future is very unpredictable.

[1] https://www.populationpyramid.net/world/2025/

throwaway81523• 7 months ago

Looks like Brownian motion to me.

cykros3• 7 months ago

The price of gold pre-1971 was always a fantasy as there was no free market for it, due to the policy rate sitting on it at $35/oz.

The price of gold before 1933 (EO 6102) was also not a terribly good indicator, as the friction of taking physical delivery of it also kept it suppressed in most circumstances, with explosive swings in times of crisis.

Arguably it's even more gamed after 1971 as it's not even used for exchange, and has a ton of rehypothecation and elaborate derivative networks.

Gold's drawback was always its physicality. Arguably its heyday was before the invention of the telegraph, when at least the expectation was that money was going to be slow, and the only way to move it across most distances was physically, unless you had some handy Knights Templar or Hawala network handy.

That we still cling to it despite all of this is a good indicator of just how fucked up fiat is though. Thankfully, we have a better alternative network being built out.

S&P500 Priced in Gold

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