In this article, we will discuss the price history of gold per ounce in comparison to a loaf of bread. The big question is, “Why do we have to compare the price of gold per ounce to a loaf of bread?” For many centuries, a loaf of bread was the staple diet of many people and a valuable commodity when we are talking about the standard cost of living.
But for centuries, a loaf of bread was over a kilo in weight. Today, there is bread that weighs 350 to 400 grams per rolls. The comparison is pretty far, as most big supermarkets reduce the cost, size and quality of the loaves they sell.
Inflation
For more than 20 years, inflation has been averaging 3.22% per year, that’s a big jump. In 1776, the United States inflation rate was 29.78% compared today which is 2.1%. You have to notice that when the cost of living indicators suggest that inflation is on the rise, the stock market crashes. Governments all over the world control inflation through lower wage growth, and it has a significant impact on the last eight years.
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Lower cost cereals
We should realize how food cereals like wheat, oats, corn and barley are produced, how their cost rise and crash in the past decade. A lot of family farms are now taken over by large multi corporations, and better cost-effective methods in farming are being used so that cereals will be cheaper and helps lower the expenses in the cost of living.
But we should remember that wheat is not like it used to be. More than 40 years ago, wheat had problems like fungus and pests like rats and insects. These problems are now genetically modified, and most of them evolved into more dangerous problems. We also have more choices of food today.
That is why bread is not the only food that people eat not like before. Our ancestors are very lucky they have more quality food to eat. That is the reason why most supermarket chains sell a loaf of bread so cheap. Basic supply and demand forces affect farm production prices.
Stable government
For many centuries, the comparison of 320 to 350 loaves of bread was a good measurement on how stable the government is. Comparison today on some formulas used showed that 500 to 680 loaves of bread per market price of gold in today’s market. You can also use other methods, but it is mathematically impossible to calculate the cost to be under 350 loaves of bread with gold production today’s market.
Debt
The country’s massive debt is also one of the factors that affect the stability of any government. The national debt is now around $71 trillion, and there are different levels of debt the country has, on top of this figure. From private to public sector, council and state deficits, the country is now facing at least $223 trillion worldwide debt — another statistic figure that we need to know, in the United States each living person owes at least $61,365. It means that even newborn babies owed the government at least $60,000.
Gold price chart
Almost ten years ago, gold prices in the market were steady. Gold Bullion price in 2010 was $1,247.20. Now, eight years have passed, the market cost of gold rises to $1,317 per ounce due to supply and demand. The demand for gold has been robust for the past eight years.
There are rumors that the price has been manipulated, but the truth is, it has been stagnant since 2010. There is no reason to believe in stories. Let’s admit it, people in power are in control of the gold market price just like they have control over the cost of Bitcoin.
But that’s how economics work. There will be someone who has total control over the prices of certain goods, but it is with reasonable cause. There are factors that we need to consider when we are talking about market prices of commodities. In 2007, gold prices were only $688.00, and the stock market crash happens.
It increases from $600 to $1,100 in just two years. We need to remember that the further we pull away from stable government to government with a lot of debt, the more people will oppose the gold standard.