Clearly, you get it. Correct, devaluation works wonders. People have also become so used to federal reserve notes, they think that currency is stable and everything else jumps up and down around it. Nothing could be further from the truth.
Here's a thought experiment. Imagine the real cost of gold. You do this by imagining how much real gold the US has. Then you imagine how much US currency there is. You can only imagine this because there is no way to know either of these variables. Now I ask a simple question: can gold be $1,800/oz? If you think not, what would you guess the real rate should be? I'm thinking north of $500K/oz.
Thank you. Regarding the real cost of gold in $US, I can't say for sure as it's so murky with all the games played and sleights of hand (such as the possible phantom nature of GLD holdings). However, I do price commodities and mature goods in ounces of gold to determine their true changes in value, determining real rates of inflation over the long term.
Edit: added a word.
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