It’s different this time.

A couple decades back, I wondered if our accumulated paper wealth isn’t somehow a function of our ability to keep track of it. From time to time, this idea recurs: once values are only abstractly related to things, perhaps we’ll always ‘manage them up’ as high as we can. When we calculated with stick figures, we could manage just so much. When we got good at paper ledgers, so much more. When we figured out spreadsheets, well…

I think about this when I wonder how much gold is worth. A dozen years ago, I was a big fan of gold at $250 an once. Gold is supposed to increase in value with inflation. These past few years we haven’t had much reported inflation, but the price of gold is up several hundred percent. Instead of an ‘inflation hedge,’ it’s a ‘value store.’ People have been buying because they’re afraid it’s the end of the world.

Now the future of the world has been re-assured, and gold is getting cheaper. Odd, because reported inflation is just starting to pick up. So I can only wonder: how far is gold’s price from its actual value?

Perhaps you’ve noticed: prices of everything else are equally bizarre. Stocks have been over-priced for so long the fundamentals aren’t fundamental any more. Government bonds are so expensive you’d think people honestly expect them to be paid back. Money, when you can get it, is free. Something is different, maybe just because it’s so easy to play with really big numbers.

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