• 2 hours Did Big Bank Earnings Just Signal ‘Real’ Economic Recovery?
  • 1 day The Cannabis Industry Is Looking To Fill The Employment Gap
  • 4 days Earnings Beat Isn’t Enough for S&P 500 Q3
  • 6 days The New World Tax Order
  • 7 days Is Crypto Finally Ready To Pay The Piper?
  • 8 days Is It Time To Buy The Global Gaming Market Dip?
  • 11 days Even The Mafia Has A Millennial Problem
  • 13 days Zuckerberg Loses Billions in Social Media Outage
  • 14 days ‘Pandora Papers’ Leak Reveals More Financial Crime
  • 15 days US Retail Has A Major Supply Chain Problem
  • 18 days China Has Set Out To Crush Crypto...Again
  • 19 days Top Performing Cannabis Stocks of the Year
  • 20 days Millennials Could Power A 20-Year Bull Stock Market
  • 26 days The Million-Dollar Question: Will China Bail Out Evergrande?
  • 27 days 3 Restaurant Stocks In Full Recovery Mode
  • 27 days Bitcoin Is Driven By Testosterone
  • 32 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 33 days How To Invest In The Cybersecurity Boom
  • 35 days Investors Are Patient With Unprofitable Giants
  • 37 days Wells Fargo Back In The Scandal Spotlight Once Again
Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Markets
  3. Other

66-year chart of beer vs gold price may lead to (heavy) drinking

Incrementum's 11th annual In Gold We Trust report analyzes gold primarily as a monetary asset and not as a commodity like say hops or barley.

The Liechtenstein-based asset managers conclude that "the competitive position of gold relative to paper money and other asset classes has improved considerably in recent months" and have 169 pages of charts and tables to prove it.

The Economist has its Big Mac index to rate the over- or undervaluation of currencies, but you have to agree with Incrementum that when looking at a suitable comparison to gold, beer is much more appropriate:

Beer drinking gold aficionados should therefore expect the metal's beer purchasing power to increase

According to the authors Ronald-Peter Stoeferle and Mark J. Valek, a “Maß” beer (one liter) at the Munich Oktoberfest in 1950 cost a converted €0.82, the price in 2016 was €10.55.

In 2016 you'd get 111 liters of beer per ounce of gold and the annual price inflation of beer therefore amounts to 4.2% per year since 1950.

Historically the median is at 87 litres making the “beer purchasing power” of gold at the moment above average.

When gold hit record highs above $1,900 in nominal US dollar in 2011, an ounce would only get you 138 litres. The driest year was 1971.

Not surprisingly, the peak occurred in 1980 at 227 liters per ounce of gold when gold topped out at $850:

Incrementum believes "it is quite possible that similar levels will be reached again. Beer drinking gold aficionados should therefore expect the metal's beer purchasing power to increase."

This gold chart will lead to more beer drinking

(Click to enlarge)

By Mining.com

Back to homepage

Leave a comment

Leave a comment