An Intoxicating Way to Think About Gold
There are many ways to assess the worth of gold, including its dollar value, comparison to the stock market, or whether it beats the inflation rate.
Since 1950, a Liechtenstein-based asset management company called Incrementum has another method: how much beer will it buy?
And in that measurement, gold is down slightly, but still solid in the long term.
Incrementum just released its 12th annual “In Gold We Trust” report, declaring that the precious metal is in the early stages of a new bull market.
“From our point of view, stronger inflation tendencies or the abandoning of the rate-hike cycle in the US could trigger an increase in momentum of the gold price,” the authors declare.
The 230-page report, available here, is full of charts and graphs and analyses that probably require a finance degree to fully understand.
But one of its elements, the gold/beer calculation, goes down easy. For 68 years, the company has tracked the price of a liter of beer at the famed Munich Oktoberfest alongside the price of an ounce of gold.
The all-time high, if you’re keeping score, was in 1980, when an ounce of gold bought you 227 German brews. Only nine years earlier it had hit the all-time low of just 48.
The total for 2017 was 99, down a few liters from the previous year but still well above the historical median of 87.
Reaction to the golden update was mixed. “I have no idea what I just read,” wrote one commenter on mining.com, which reported the news. “But now I want some gold and a beer.”