Using gold pricing to get an accurate measure of your investment performance will enable you to do more than just survive the upheavals ahead – you will be able to make a fortune!

I urge you to watch the video, understand where the actions of governments and central banks are taking us, and most importantly, I urge you to look over your portfolio, to look over your life, and take action!

If you have questions or comments, send me an email, leave a comment, or call the Priced in Gold Hotline at 888-868-5656.

Even though I missed only a few of the general sessions, I can't wait to get my hands on the recordings to go through them again for profitable ideas, and to clarify in my own mind the arguments, pro and con, on issues that will be key to my investment decisions in the coming months.

One of those "out in the hallway" discussions got me to thinking about wages, valued in gold… and I put together a chart of wages (average hourly earnings of US production workers, as tabulated by the BLS in series CES0500000008, to be precise) to see what they've been doing.

I was shocked to see that since January 1964, a total of 534 months, there have been only 36 months in which wages were lower than they are today – mainly in the period from 1979-1981. The most recent period when they were this low was early in 1988, 20 years ago. Since then they have seen a high of 1.75 grams/hour in April of 2001, before falling back to their current level of 0.6 grams/hour in July of 2008.

I thought it would be fun to take a look at how things have changed over that 20 year period in terms of gold prices, many of which can be found in the charts section of this web site. Here is a summary:

1) Although wages are about the same, per capita disposable income is up 9%. I suspect this is due to many factors, including lower tax rates, changes in government "benefits", more dual earner households and smaller families. It could also be influenced by the proportion of "production" jobs in the economy. In any event, this is a modest increase for 20 years!

2) First class postage is down 6%, one of the few things I could find that was down!

3) Stocks were a mixed bag. The Dow Jones Industrials are around 400 now, up from about 125 in 1988 – a rise of 220%, even after their spectacular fall from the 1999 high of 1,400. What a roller-coaster ride! On the other hand, Japanese stocks as measured by the Nikkei 225 Index were much stronger in 1988, and have fallen from 12 to 4.5 – a drop of 63%. I plan to do a more detailed comparison of these markets in a future post.

4) Home prices, as measured by the Case-Shiller CSXR Index, are up about 33%, even after falling more than 50% over the last three years.

5) Commodities are up strongly: silver up 29%, gasoline up 89%, copper up 98%, crude oil up 275%, and wheat up a whopping 347%.

The US government's own debt is also a huge and growing problem. While in 1988 it was a "mere" 2.6 trillion USD, today it is over 9.4 trillion USD, up 262%. If this debt had to be settled in gold, that would require 308,376 tonnes of gold today, up from 204,000 back in 1988. It's a good thing that this debt is denominated in US Dollars that can be created out of nothing with the press of a few computer keys! There are only 8,133 tonnes of gold in the US reserves (even this figure is disputed, as it has not been physically audited for decades.) And to put the size of this debt in perspective, all the gold ever mined, since the beginning of time, is estimated at about 150,000 tonnes – that's less than half of the current US Federal debt.

But these figures, as grotesque and gargantuan as they are, are just the officially acknowledged tip of the iceberg. They don't include off-budget borrowing, consumer borrowing, or the real elephants in the room, the ones no one in polite society wants to talk about – the "unfunded liabilities" and future entitlements of social security, medicare, and related programs. While current taxes are generating enough cash to cover these at the moment, due to changing demographics they are growing at a rate that cannot be met simply by new tax increases. Unless changes are made, their costs will overwhelm even the ability of our printing presses to pay for them!

How did we get to this point? What can we do about it?

At the Vancouver Symposium there was a showing of a new documentary film called I.O.U.S.A. that addresses many of these points via fascinating interviews with Pete Peterson, Warren Buffett, former Comptroller General of the United States David Walker, and other luminaries. It's a wonderful film, well made, very thought-provoking, and highly recommended.

Most people have little grasp of what is happening with their money. Most have no idea what is heading down the tracks toward them financially. If you have family and friends in this situation, I urge you to take them to see this movie. It is fun, fast paced and informative. They may be shocked, but they won't be bored!

There will be a special "one day only" premier showing of the film all over the USA on Thursday, August 21st. I'm going, along with many of my friends who weren't able to see it in Vancouver. You can get details, watch a trailer and check out the special offer Agora Financial is making to those who pre-purchase tickets, as well.

I hope you will join me!

From a March 11, 2008 story in the Associated Press:

As originally stated in dollars:

Gas Prices Rise to New National Record

NEW YORK (AP) – The cost of filling up the family car climbed to a record high Tuesday, adding to the challenges consumers already face with falling home values and rising food prices.

Gas prices at the pump rose overnight to a record national average of $3.2272 a gallon, according to AAA and the Oil Price Information Service. That's a tad higher than the previous record of $3.2265, set last May.

On Tuesday, light sweet crude for April delivery surged to a new trading record of $109.72 on the New York Mercantile Exchange before retreating after the Energy Department and International Energy Agency cut crude consumption forecasts for this year. Futures settled 85 cents higher at $108.75 a barrel, a new record.

Where gas and oil go from here is anybody's guess. Many analysts expect prices to moderate, while others predict oil could keep rising to $120 a barrel, or higher. And with demand for gas expected to rise as warm weather arrives, analysts say pump prices could spike as high as $3.75 a gallon, regardless of what happens with oil prices. The Energy Department on Tuesday raised its forecast of how high prices will rise this spring by a dime to $3.50 a gallon.

Restated in gold:

Gas Prices Rise, but Remain Among the Lowest in the Last Decade

NEW YORK (AP/PricedInGold) – The cost of filling up the family car rose slightly Tuesday, but not enough to add to the challenges consumers already face with falling home values and collapsing stock portfolios. In fact, falling food prices and the lowest gasoline prices since 1996 are among the brightest spots in the consumer's financial picture.

Gas prices at the pump rose overnight to a national average of 103.6 mg of gold per gallon, according to AAA and the Oil Price Information Service. That's less than half of the recent high of 217.4 mg, set back in September of 2005.

On Tuesday, light sweet crude for April delivery rose to 3.518 gold grams on the New York Mercantile Exchange before retreating after the Energy Department and International Energy Agency cut crude consumption forecasts for this year. Futures settled 25 mg higher at 3.487 a barrel, about 5% below their price at the beginning of the year.

Where gas and oil go from here is anybody's guess. Many analysts expect prices to fall, possibly retesting 2007 lows around 2.5 grams, while others predict oil could keep rising to retest the 2007 highs of 3.85 grams a barrel, or higher. Even with demand for gas expected to rise as warm weather arrives, analysts say pump prices are unlikely to rise above 125 mg a gallon and more likely to drop below the 100 mg level, regardless of what happens with oil prices. The Energy Department on Tuesday raised its forecast of how high prices will rise this spring to 112.3 mg a gallon.

Stocks (as indicated by the Dow Jones Industrials at 474) were last this low in September of 1996. But in those days, they were on the way up – about 15 years into a 20 year bull market – just leaving the foothills behind in the dramatic run-up to almost 1400 gold grams in 1999.

Some commodities have rallied, however. Platinum in particular has shot up dramatically – from about 54 to over 70 grams/oz in the last month. Silver is also showing some strength.

Going forward, remember that the tax refunds, rate drops, and mortgage relief plans all amount to devaluation of the money in in your pocket and in your bank and brokerage accounts. Never trust values given in fiat currency: they are subject to the whims of those who issue that currency. Keep your eye on the true value of your investments and assets – their value measured in gold.

That price was $1.66 per gallon, and the dollar at the time was worth about 63.6 mg of gold, so gas was around 106 mg of gold per gallon, about the same as the recent low in February of 2007.

Interestingly, the highest price I've found so far for gasoline is 295 mg of gold, back in 1970, when gasoline was selling for 34 cents a gallon (but the dollar was worth 880 mg of gold.)