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.

The Podcast

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.

But some are not so easy:

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.

Now, there is one big problem with this graph and that’s the GDP deflator.  It is, I presume, calculated by the government so all sorts of inaccuracies could have crept in.  I mean how has it been calculated down the decades? - that’s bound to have changed.  And who’s to say that at some point the calculators haven’t been leant on to massage the figures?

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've heard of Windows 3.1. I am about to a lot about Windows 7. But I've never heard a peep about Windows 4, 5 or 6. Were they, by any chance, really good versions of Windows that we never got to hear about because the praise for them was drowned out by complaints about 95, 98, 2000, Millenium and Vista?

I think we should be told.