I appreciated the GDP-to-gold graph exactly because it’s not doing the thing the OP thinks it is doing, but rather showing the extent to which gold is a favored store of value slash the growth rate of wealth as opposed to income/production (GDP), and what that implies about the value of gold as an investment and the forward interest rate. It’s much cleaner than how I’d been thinking about it before, and the logic likely extends (amusing graph: GDP-to-Bitcoin, world is clearly ending).
Same with the hypothetical GDP-to-land, here, since that seems to have important implications worth thinking about, as well.
GDP-to-oil is going to have a lot of idiosyncratic movement as oil supply changes and our energy sources evolve.
GDP-to-corn is going to capture some idiosyncratic movement from agriculture, as Paul notes, and also for corn in particular—I’m guessing its subsidies make it a special case? So it’s kind of like we’re multiplying GDP-to-CPI by CPI-to-corn for some smart thing in the CPI slot, but the question of how much food our stuff is worth does seem like a good sanity check. How much food a worker can buy with their labor, better still.
showing the extent to which gold is a favored store of value slash the growth rate of wealth as opposed to income/production (GDP), and what that implies about the value of gold as an investment and the forward interest rate. It’s much cleaner than how I’d been thinking about it before, and the logic likely extends (amusing graph: GDP-to-Bitcoin, world is clearly ending).
Sure, but we don’t expect a long-term positive trend in GDP/gold. If it’s roughly constant over the long term, the conclusion is “people’s attitude towards gold isn’t changing too much,” not “we aren’t getting richer after all.”
I appreciated the GDP-to-gold graph exactly because it’s not doing the thing the OP thinks it is doing, but rather showing the extent to which gold is a favored store of value slash the growth rate of wealth as opposed to income/production (GDP), and what that implies about the value of gold as an investment and the forward interest rate. It’s much cleaner than how I’d been thinking about it before, and the logic likely extends (amusing graph: GDP-to-Bitcoin, world is clearly ending).
Same with the hypothetical GDP-to-land, here, since that seems to have important implications worth thinking about, as well.
GDP-to-oil is going to have a lot of idiosyncratic movement as oil supply changes and our energy sources evolve.
GDP-to-corn is going to capture some idiosyncratic movement from agriculture, as Paul notes, and also for corn in particular—I’m guessing its subsidies make it a special case? So it’s kind of like we’re multiplying GDP-to-CPI by CPI-to-corn for some smart thing in the CPI slot, but the question of how much food our stuff is worth does seem like a good sanity check. How much food a worker can buy with their labor, better still.
Sure, but we don’t expect a long-term positive trend in GDP/gold. If it’s roughly constant over the long term, the conclusion is “people’s attitude towards gold isn’t changing too much,” not “we aren’t getting richer after all.”