Michael’s theory is that one of the consequences of the current recession/depression/end-of-civilisation-as-we-know-it, is that a whole bunch of industries that have been around of donkeys years are going to disappear. He reckons that this will include: book shops, newspapers and opticians.
This podcast marks a first. It is the first to be recorded down the line using Skype. I think it works pretty well.
I am not quite sure how this came about but you know how it is: you start rootling around in the numbers and before you know it you’ve produced a table with the gold price divided by the GDP deflator for every year the 20th century.
And then you do a graph (click to enlarge):
Now parts of this graph are easy to explain:
- Why is the number for 1900 almost exactly the same as it is now? Easy, gold preserves its value.
- Why the huge upsurge in the 1970s? Because people were scared of inflation.
- If the 1970s inflation caused an upsurge why not the Great War inflation?
- What was going on in the 1930s? Sure there was an initial upsurge after Britain abandoned the Gold Standard in 1931 but after that nothing.
- Why the gradual decline after the Second World War? I offer as a possibility that people had confidence in their currency even though it was slowly but surely losing value. Actually, that might well explain the post-Great War decline as well.
But it’s the best we’ve got. And when it comes to being a store of value gold is the best we’ve got.
Unless I do the figures for silver…
I think we should be told.