S&P500 Priced in Gold • Hacker News Board

Re: S&P500 Priced in Gold

#51

Post by fdr » Thu, Jan 01, 2026, 6:00 AM UTC

jameslk wrote: post #38

fdr wrote: post #32

Earlier quoted context omitted.

It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s. I like to think about the inherent contradictions of goldbugs going long on central bank portfolio pol…

When people talk about inflation, I don't think they're referring to just CPI, but asset inflation too. Things like equities, real estate, gold/silver/platinum, bitcoin, etc. These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.

That's a lot of financial devices painted with a broad brush, and I think the charge that so may central banks are knuckled under with fiscal dominance is simply not sustainable. The ones that are, we tend to hear about.

Because there's a lot one could write about each of: equities, real estate, gold, silver, platinum (which have very different industrial exposures), and bitcoin, which have many price drivers.

So let's try something more parsimonious: what do you make of people, institutions, etc that bid on short and even long-dated sovereign debt around the globe, and come up the collective discovered price of, say...3.5%, annualized, for maturity in a month? https://www.treasurydirect.gov/auctions/announcements-data-r...

Re: S&P500 Priced in Gold

#52

Post by cyber_kinetist » Thu, Jan 01, 2026, 10:17 AM UTC

ajross wrote: post #22

xeckr wrote: post #4

Earlier quoted context omitted.

I'd definitely be curious to see the S&P valued in different commodities over time. With that said, gold certainly feels like a special indicator given its history as a universally recognized store of value.

> history as a universally recognized store of value. History of what now? Gold is a volatile commodity. It has crashed , many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000. And given its value right now, it's probably due for another.

To add some context, gold was actually something backed by the US government during the Bretton Woods era (40s-70s), where 1 ounce of gold was pegged to 35 dollars. This was only possible because the US accumulated so much wealth relative to rest of the world after WWII, so they controlled the majority of the gold supply. After the golden age of Keynesian America ended with stagflation in the 70s, the US government had to stop all of their gold from fleeing the country, so this guarantee had to end. Which leads to the Nixon shock, where the dollar (and all other currencies as well) became free-floating, and we enter a brave new world where humanity hasn't lived before (neo-liberalism).

Given all that, it's easy to see why the value of gold has plummeted during the 70s - 00s. Though I could see two reasons as to why gold prices are rising during the last decade:

- Gold is actually just a part of the asset bubble (in the same group as housing, stocks, and crypto), and investment in it is aided by too much money printed by the US government not being used towards productive ends but towards rampant asset speculation.

- The current era of neo-liberalism is going to end pretty soon, and some goldbugs are rooting for the revival of late 19th-century classical capitalism, where gold was actually the international standard. I think this is very unlikely though, even if the US dollar loses its status with the end of the petrodollar system. My guess is we're going to deal with free-floating currencies for quite some time, especially when wars are going to happen and governments have to print more money to sustain their war efforts. (I think the best monetary system would be neither gold or crypto, but instead something like the Bancor (https://en.wikipedia.org/wiki/Bancor))

Re: S&P500 Priced in Gold

#53

Post by ajross » Thu, Jan 01, 2026, 2:30 PM UTC

cyber_kinetist wrote: post #52

ajross wrote: post #22

Earlier quoted context omitted.

> history as a universally recognized store of value. History of what now? Gold is a volatile commodity. It has crashed , many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000. And given its value right now, it's probably due for another.

To add some context, gold was actually something backed by the US government during the Bretton Woods era (40s-70s), where 1 ounce of gold was pegged to 35 dollars. This was only possible because the US accumulated so much wealth relative to rest of the world after WWII, so they controlled the majority of the gold supply. After the golden age of Keynesian America ended with stagflation in the 70s, the US government h…

This is one of those bell curve memes. All your text sits in the middle. The Jedi and I are off on the ends screaming "Gold is just a bubble!"

Re: S&P500 Priced in Gold

#54

Post by jjav » Thu, Jan 01, 2026, 2:37 PM UTC

bot403 wrote: post #30

OutOfHere wrote: post #15

Earlier quoted context omitted.

Storing gold costs nothing but a little space which isn't an issue given how compact it is.

Oh good. I have a spare spot in my front yard to place it. Or maybe I'll just set it down on my dining room table. Wait...I might want something more secure than that. And if I have a lot of gold I might need to pay people to protect it. These storage costs are going up.

You can fit millions of dollars worth of gold in a shoebox. Space is not an issue for any normal-person amount of wealth in gold.

Re: S&P500 Priced in Gold

#55

Post by AnimalMuppet » Thu, Jan 01, 2026, 2:39 PM UTC

knocte wrote: post #29

syntaxing wrote: post #5

What does this mean? That the valuation of dollar dropped as much as the SP500 growth?

Yes

No. Very much no. It means that gold does not have a stable value, and using it as the yardstick to measure the value of other things just leads to confusion.