The price of gold fluctuates, but generally in an upwards direction. Since 13 January 2002, when the price of a troy ounce of gold was around $297 as of 5 May 2020 it has risen to more than $1,698.
If we take a few random dates – 6 April 2009, 1 April 2010 and 14 April 2019 – we can see that the gold price (per troy ounce) on those days was, in US dollars, $897.62, $1,179.47 and $1,301.73. That’s an increase of $404.11 per ounce over the last ten years.
In the US the average weekly wage in the last quarter of 2009 was $942. In 2010 it was $971 for the final quarter. In the third quarter of 2019 (the latest data available) it was $1,093. So, in the last ten years, weekly income hasn’t increased very much at all, just $151.
The US Bureau of Labor Statistics, which covers 22 major metropolitan centres, says the average weekly household grocery spend during 2017-18 was between $314 and $516. On average the typical US household’s weekly shop cost $415.
“…gold, if used to buy the US average weekly shop on 1 April 2009, would have covered it and with $482 left over.”
It does not take a mathematical genius to work out that a troy ounce of gold, if used to buy the US average weekly shop on 1 April 2009, would have covered it and with $482 left over.
If the same single troy ounce had paid for the weekly shop on 14 April 2010 the American shopper would have had a ‘surplus’ of some $764.
“In the US that one ounce of gold in 2019 would have paid for more than three weekly average grocery trolleys.”
And if the same 1 ounce was spent on the US weekly shop on 14 April 2019, it could have paid for more than three weekly average grocery trolleys.
“gold price will continue to rise, to $3000 an ounce”
If some forecasters, such as Bank of America, are correct that the gold price will continue to rise, to $3,000 an ounce in 18 months, that would be more than 50% higher than its existing record.
“…pay for…seven weeks of the average US weekly shop with one troy ounce of gold…”
At $3,000 a troy ounce you could pay for more than seven weeks of the average US weekly shop with one troy ounce of gold.
Until now, unless you were a bullion dealer or someone who was very connected, with a great understanding of buying and selling gold, it’s unlikely that most of us would have the knowhow or the confidence to benefit from the stable value of gold. Also, let’s face it, before now, it wasn’t actually possible to use gold in the grocery store to buy our weekly shop.
Today, however, thanks to GLINT, most people can now use gold as regular, everyday money and save fortunes on their bills. It’s super simple and super secure. We recommend that you go to your favourite App store and download the Glint app to unlock the benefits of using real, physical gold, that you own, today. Now, you really can save your hard earned cash and pay for your weekly groceries in gold!
One of the numerous tasks of the US Federal Reserve – America’s central bank – is the maintenance of stable prices. The last few chairmen (and one woman) of the Fed have had a fairly easy job when it comes to keeping prices (inflation versus deflation) on an even keel. You have to go back almost 30 years, to 1991, to find the US inflation rate nudging above an annual 4%. Since that year it has occasionally crept above 3% but has generally been much lower.
Since the mid-1990s the Fed has ‘targeted’, i.e. aims to achieve, an annual rate of 2%, but this year US inflation is likely to be around 1.75%. Any change in this policy is rather unusual. It might have reverberations around the globe; for, as US interest rates go, others tend to follow.
Maintaining stable prices in an economy the size of the US – the world’s biggest since 1871; this year its gross domestic product (GDP) is likely to be more than $21 trillion –inevitably is a herculean task. No-one really manages this outsize octopus: it manages itself. With regards to stable prices, all the Fed can hope to do is to stop it from keeling over into runaway inflation on the one hand, or collapse into deflation on the other. The Fed, of necessity, needs a sensitive touch on the tiller.
For most of us that light touch manifests itself through Fed’s changes to US interest rate policy – pushing rates higher when the economy seems likely to overheat, or lowering them when it seems in danger of stalling. That’s been its conventional wisdom for what seems like forever, perhaps since 1913, when President Woodrow Wilson signed the law that established the Federal Reserve System. So the news that the Fed is considering relaxing its 2% target for inflation might turn out to deserve much more attention than it has so far received. As often the case, central bankers prefer euphemisms to disguise hard truth; so the Fed say it is thinking about what it calls a “make-up strategy” rather than simply saying ‘we’re going to abandon the 2% target’, and it is easing market acceptance of this by careful news management.
This abandonment of the 2% target has been floating around the think-tanks of Washington D.C. for some time. In June 2018 the Brookings Institution published a paper on this topic, which ended by rhetorically asking “wouldn’t a little higher inflation be nice for everyone?” It all depends on what is meant by a “little”. Not the kind of inflation that happened in Hungary in 1946, where prices doubled every 15 hours; in August 1946 the total value of all Hungarian banknotes in circulation was worth one-tenth of a US penny.
President Gerald Ford gave away lapel badges in the mid-1970s with the slogan ‘WIN’ – which stood for “whip inflation now” – when inflation was running at around 6.5%. But today, with unemployment the lowest it has been for decades, the printing of money, and extremely low interest rates, inflation seems like a thing of the past, like a dead dinosaur. The big worry right now for the Fed (and the European Central Bank and most other central banks too) is deflation. Deflation shrinks consumer demand, which can lead to lower prices, companies going out of business, trading collapses…pretty soon a deflationary economy starts to resemble Japan’s “lost decade”. In Japan, more than 20 years of zero interest rates has still failed to push annual inflation up to 2%: all kinds of odd suggestions are now being made, such as the abolition of cash.
One can sympathise today with the US Federal Reserve; indeed with all central bankers. They have tried just about every trick in their books to steer their national economies towards growth rates above a couple of per cent – low to negative interest rates, money-printing, and even using the central bank to buy shares in publicly traded companies, in the case of Japan. All this has been to no avail.
As central bankers fret, however, the risks of them falling prey to extreme temptations become ever greater. Abolishing cash sounds crazy right now, but who knows? The idea of developing national digital currencies and giving this ‘stable money’ to households, on condition that it is spent, not saved, would certainly spur inflation – but the law of unintended consequences might well come into play.
Perhaps all that can be safely said is that with each passing day the uncertainties are increasing; who would have imagined that the Fed would drop its once-iron rule of targeting 2% inflation. In this scenario it seems logical that people are increasingly thinking of holding more gold, valuing its certainty in the swirl of growing certainty.
August 1, 2019, Boulder, CO – Glint Pay Inc. (Glint), weighs in on the news regarding the US Fed’s interest rate cut.
“The Fed’s decision to cut its benchmark interest rate by 25 basis points, to 2.25% – the first cut it’s made since December 2008, when the Great Recession was getting going – is a clear sign that US interest rates are going to stay way below their pre-crisis levels of 4% to 5%, for years to come. And that in turn is one of the clearest signs that we are facing a significant gold bull run, also for years to come,” said Jason Cozens, CEO of Glint, which launched its debit Mastercard in the USA this week. Cozens added that “there obviously will be ups and downs for the gold price in the coming months, as speculative investors choose to take profits. But the combination of an inevitably weaker US dollar and considerable geopolitical uncertainty mean that the price trend is firmly up.”
The Federal Open Market Committee since the end of 2015 made nine increases to the federal funds rate. President Donald Trump has pressed the Federal Reserve to make a rate cut and said this week that he would “like to see a large cut and I would like to see immediately the quantitative tightening stop.”
Glint is a FinTech that uniquely enables physical gold to be used as money digitally, along with offering a multi-currency account and debit card. Its vision is a world where everyone has an equal opportunity to prosper, made possible by providing everyone with a reliable form of money, gold. Glint, in partnership with Mastercard, enables its clients to buy, save, exchange and spend physical gold, and other currencies, anywhere in the world Mastercard is accepted.
Glint – Money’s New Standard – is a FinTech that uniquely enables physical gold to be used as money digitally, along with offering a multi-currency account and debit card. Its vision is a world where everyone has an equal opportunity to prosper, made possible by providing everyone with a reliable form of money: gold. Glint, in partnership with Mastercard, enables its clients to buy, save, exchange, and spend physical gold, and other currencies, anywhere in the world Mastercard is accepted. Glint’s clients know their gold is secured in a Brinks Vault in Switzerland and insured by Lloyds of London. Gold, and all currencies purchased via Glint, are in safeguarded and segregated accounts. Already available in Europe, Glint launched in the U.K. in February 2018 and is set to launch in Canada, Japan, Scandinavia, and the USA in 2019. The Company has tens of thousands of clients to date. Gold is the world’s alternative to government-controlled fiat currencies and has been a secure and globally accepted form of payment since 4,000 BC. Glint is a tangible alternative to cryptocurrencies, because it provides ownership of physical gold and permits instant gold-based purchases. Glint interacts with the global banking system and is a form of instantaneous payment for goods and services.
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