Flutterby™! : gasoline prices and gold standards

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gasoline prices and gold standards

2008-04-30 19:58:57.46677+00 by Dan Lyke 6 comments

Because discussion of gold standards has come up before in the context of gas prices, and I didn't find enough historical data to make the really compelling graphs I wanted to make: US retail prices of gasoline in mG of gold, and gasoline prices 1918-2006, inflation adjusted. Via this MeFi thread.

[ related topics: Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2008-05-01 02:05:21.196865+00 by: ziffle [edit history]

the first chart is only ten years which is too short.

the second chart uses 'inflation' whatever that is, and still stays in a range. The peak in the 1970's was the result of the artificial shortages caused by the government, and the recent peak could be looked at the same as they will not allow any new wells nor refineries. The debasement of the dollar is a big issue here too. Finally the high cost of gasoline is the policy of many in congress who want us to build more efficient cars. Fascists.

#Comment Re: made: 2008-05-01 13:45:16.957846+00 by: Dan Lyke [edit history]

Edit: Removed for the moment, I got my data backwards and mislabeled.

#Comment Re: made: 2008-05-01 16:22:38.999097+00 by: Dan Lyke [edit history]

Edit: No, wait, that's distinctly not right either. Sigh.

#Comment Re: made: 2008-05-01 18:36:59.181609+00 by: Dan Lyke [edit history]

Okay, I'm an idiot. Here it is, ounces of gold per gallon of gasoline, 1949 to 2006. Gold data 1949 to 1999 is average for year, 2000-2006 is price at close of market on December 31.

#Comment Re: made: 2008-05-01 19:30:20.935335+00 by: ziffle [edit history]

1971 of course was the year Nixon took us off the Gold standard, letting gold go from a nominal $35 per ounce to a floating market price.

This should actually be in barrels of oil, because since 1971 our government has run up a current debt of nine trillion doallrs by printing money and that will cause the apparent price of gasoline to go up for us but overseas they may be in better shape if they did not debase their currency, like Brazil or Canada I suppose.

The Whole Story

The general public, the media and most financial observers were largely unaware of the momentous event that took place on August 15, 1971. However, the implications of that event have had an enormous impact on global financial conditions ever since. On that date, US President Richard Nixon closed the gold window. In essence, this meant the US would no longer honour the Bretton Woods Agreement of 1944, which made the US dollar the worlds reserve currency, and allowed other countries to convert their US dollar holdings into gold. In simple terms, the US defaulted. Those who may have glanced at the announcement buried within the pages of their daily newspaper were unlikely to have understood the implications for their financial future.

Our decreasing Money:



Without the fiscal restraints inherent in a gold backed currency, politicians worldwide were able to promise social programs and expand government bureaucracies that could be delivered through borrowing money created by the central banks rather than through direct taxation. They could embark on military campaigns with borrowed dollars that future generations would have to repay.

#Comment Re: made: 2008-05-01 20:44:08.222515+00 by: Dan Lyke

I found numbers for domestic crude, which, modulo the friction of transport, should be pretty close to world numbers, so for giggles we'll go with that: