Gold is widely considered a good investment to protect against inflation. But has gold really kept up with inflation, in terms of purchasing power? In 1932, 1 ounce of gold was worth about $20. At the time of writing in 2014, 1 ounce of gold is worth approximately $1,260. How does that translate into goods and services?
In the 1930’s, you could buy the best quality men’s suit for $20 – about 1 ounce of gold. Today, you can buy a high-quality suit for about $1,000 – still about 1 ounce of gold.
In the 1960’s, the average rent in Burbank, California for a single person was about $60-$75 per month. Today, the average rent in Burbank, California is about $1,600 per month – about 3 ounces of gold then, and 1.5 ounces of gold now. Gold still keeps up with inflation.
Today, 3 ounces of gold will buy you a “fully-loaded” Mackbook Pro. Unfortunately, you couldn’t buy a Macbook Pro in the 1930’s. However, you could buy a Remington Portable Typewriter for $60 dollars – or about 3 ounces of gold.
While inflation has greatly weakened the purchasing power of the US Dollar over time, gold has maintained its value, and purchasing power.
Are you, or someone you know, interested in diversifying their investment portfolio? Many financial advisors recommend their clients invest 5% to 15% of their investment portfolio in rare coins, and precious metals as a hedge against the weakening of the United States Dollar, inflation, and world instability. We also offer up to 15% commission on jewelry sales when you refer your friends or family. Please call Paul Albarian today at (818) 827-7152 to set up an appointment and get free information.