I’ve been talking to some of my local gold bug friends (we’re now trying to meet at least once a month) and we’ve been doing some minor budget-versus-gold comparisons. Basically, each of us already keeps a fairly accurate monthly expenditure log and a not-so-accurate desired-budget (we all go over it). I believe we’re going to move forward to start keeping track of how much we spend each month in US dollars, and how much we spend in gold ounces. I have my data going back at least 4 years, and some of them longer. I’ve invited them to get online to the forums so they can start posting their information in a generic sense. I’m going to pay every US$20 per month (3 months in advance) via paypal who joins in, up to a cap of 20 people.

Are you interested in helping out? We’d like to get a better idea of a national (or international) sense of how gold holds up against the changing costs of living. These are the numbers we’re looking for:

1. What did it cost you for your home, set costs (mortgage principal, interest, insurance, property taxes, association fees)
2. What did it cost you to utilize your home (energy, cable, maintenance)
3. What did it cost you for transportation (vehicle loan, maintenance, gas, insurance)
4. What did it cost you to eat (groceries, eating out)
5. What did it cost you to provide for your health care (insurance, medical visits, supplements)
6. What did it cost you to entertain yourself

If you want to join, you can do so anonymously (only I will know and I won’t share who it is). We want to start as of January 1st, and I will pay, in advance, US$60 per quarter via paypal. I’d like to do this for 3 years, and since it is only going to be submitted once a month or once per quarter, it should be fairly easy to maintain as a forum post. If you’re interestd, that’s US$360 per year if you can submit your information.

The upside is that if you’re NOT keeping track of this information, you will have to now. A double win. It will also help me to diagnose the long-term benefit of gold over typical investments in terms of retirement planning and other concerns.

Discuss this article at the gold investment forum.

ARLINGTON HEIGHTS, IL

By A. B. Dada
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A very close and Statist friend of mine is also a goldbug (go figure). He’s been one of the brains behind trying to find various ways to plot gold versus other goods — my idea of charting gold versus consumer goods fell through because the work was more than I could handle on my schedule that changed each week. We’re still hoping to get a few dozen people around the country to submit their own data each week, but it is still a big responsibility that gets thrown off if people miss their marks.

We were talking late into the night last night and he made a good point — how would the gold versus barrel of goods chart differ if we set gold to an unchanging number? I spent a little time this morning adding a few more fields to my spreadsheet. Instead of just having the price of gold fluctuate, I took the average price of gold over the term of the chart (a changing average each day), took the actual day’s close of a good (say oil), subtracted it from that day’s gold closing price, and added it to the average. I’m no math whiz, but I think this would give us a good idea of what prices are like if gold was considered a constant. If you can think through my calculation process, let me know if this idea isn’t correct.

I rendered the chart, and this is what I got (click to open in a bigger window):

This is an interesting chart, I think, and I definitely want to find ways to show more products without cluttering up the chart. Gold is purple, and a flat line. The other goods are fluctuating versus the price of gold as a constant. It seems the barrel of goods stays the most consistent versus gold (I’m not sure if this can be considered a valid number because gold’s weighting in the chart). Versus gold, oil has fallen a LOT — pre-election? Let’s watch and figure it out. Silver is way up above gold — because of demand or reduced supply? The DJIA has skyrocketed, too — pre-election?

Discuss this at the gold investment forum.