[arthurus]

Gold is a "barbarous relic" to those economists and politicians and bureaucrats who desire to control from the politicval center the ups and dwns of economies. The Keynesians, especially, believe that all facets of the economy should be under the direct control of the Political authorities and that they should be abe to "manage" inflation and production and everything else by making "adjustments." Gold is a very visible measure of the failures of the Keynesians and the Monetarists and the politicians to accomplish anything, at least the things they wish to accomplish. They work for short term ends and use tools that produce long term effects which are not at all understood by the tool users. Gold is not an investment for value gain because gold is the measure of value. Gold is a safe harbor for assets in that its value does not change appreciably.

The price of oil has, indeed moderated from the short term increased scarcity in the market but it is still double what it was only a couple of years ago. And housing, levelling off, remains much higher. The rapid and large increases in both these things shows the working of very real inflation. If they actually decline we can expect rises in the market generally. The extra dollars that are inflation have largely
gone into real estate and oil since 2000. If those areas decline then those dollars will be in the market chasing everything else. Evidence that these price rises are, in fact, the manifestation of inflation is that while oil and RE have gone up rapidly, other goods have not declined or disappeared. If the money supply were stable, i.e. no inflation, the sharp rise in a major segment of the market would be accompanied by declines in the rest of the market

[detsaoT]

If the money supply were stable, i.e. no inflation, the sharp rise in a major segment of the market would be accompanied by declines in the rest of the market

Yeah, but in this case, didn't the crash of the stock market pretty neatly correlate with the beginning of the "real estate bubble"?

[justshutupandtakeit]

All that is necessary to believe that is to ignore the REAL history of the Gold Standard and just PRETEND. It has NEVER been a stable regime and has ALWAYS been ended whenever war broke out.

In fact, there have been very few periods when that regime worked and every time it was left in place it dragged the economy down. It has too since it cannot expand fast enough to fuel economic expansion.

Gold will never be a monetary instrument again.

[Robert A Cook PE]

Well, true.

But "gold" and "oil" have the same "value" (as commodities) that they did in the 60's, 70's, 80's, and 90's. So changes in oil and gold and steel prices do reflect inflation.

Houses, now, are (usually) much larger, much fancier and so can't be directly compared when looking at prices. House location, too, changes in value as traffic and neighborhood desirably changes. House prices, as speculation forces prices up, are not a good indication of inflation in the long run. You can't compare a 1920's downtown/midtown (now slum) 3000 foot house with a suburban 3000 foot in a classy neighborhood.