$1.00 invested in the S&P 500 in 1970 is worth over $300 now, not including dividends.
Which really puts Gold to shame.
Yes, although I think more people are diversifying into "real" assets as paper value can disappear fast, and I guess more people are thinking that there is bit of a chance of that situation coming soon?
I'm just thinking out loud, and I think/hope most of my points are mostly true?
At some point in the 70's when most countries got rid of the gold standard, the paper value of the stock market has out paced the physical economy of supplying physical things, and services that people need? So I think the recent gold price spike is because some big players are buying into gold again, to convert paper to something real? And gold is much easier to buy and sell than a farm, or forest, or apartment building, or Civil engineering company. So while the S&P shares has gone up at ~10%/yr, the utility value of the companies, or the nation, in physical terms has not? Otherwise the average family would have 4 houses and 10 cars each?
It seems we are going the other way, with the average person able to afford much less! In 1970 a house was 2-3-4 times one average man's yearly wages. Now its 6-7 times 2 peoples average yearly wages. Same with farm land, it was $200/acre in 1970 and now $10-12k? I guess that's the cost of turning paper gains increased money supply into real assets?
Also the US and the western economies were/are using their inflated paper value to get real assets from the rest of the world for "nothing" other than giving them the inflated paper money? This also got rid of much of the need to manufacture goods in relatively expensive factories in western economies. So that was kind of good for a while, as we all got our widgets and appliances for much less than our own labor to make them would cost! But now that isn't happening as easily.
So now within the US and western economies, the majority of people aren't getting the benefits of global free trade and capitalism. Or the economic benefits of living within or closely allied with the nation that increases the global money supply, as their real purchasing power and quality of life is decreasing? So in theory, in a functioning democracy, if enough people think the current economic rules aren't working for them, then they will vote for it to be changed?
So I guess buying some gold is a bit of insurance against the "infinite growth economics" and "global free trade" systems failing ,and/or the tariffed trade experiment failing, or succeeding? Or the majority deciding to change the economic rules to help them succeed again?
