Chart of the day: Hours of work needed to buy an ounce of gold
By Global Macro Monitor
More great work from our friends at The Chart Store. It now takes over 88 hours of work at the average hourly wage to buy an ounce of gold. What an incredible increase in the relative price of gold and loss of confidence in fiat currency. Sorry, PK, it ain’t just about Glenn Beck’s marketing campaign.
Could it be the anticipation of a period of massive monetization of unpayable sovereign debt? Or could it be just a huge bubble? You decide.
Let’s hope we’re not running charts in a few years (let’s hope we’re still around) on the number hours needed to buy a loaf of bread. Stay tuned, BTW, for the number hours work needed to buy a bushel of wheat.
And there’s the rub. Central banks have done a great job at driving up the price of gold but a horrible job at creating wage inflation. If it now takes 88 hours to buy an ounce of gold versus 20 hours in 2000, hasn’t that grossly deflated real wages in a strict monetary sense? Just askin’.