just to get a feel for the intrinsic value of gold vs paper...

just to get a feel for the intrinsic value of gold vs paper price - and hence why the paper market is being marched the way it is

in 1947 - US gold price was $34.71, US GDP was $US243b and US debt gdp ratio was 103%

now US GDP is ~$22T (so lets be kind and say 100x), US debt gdp ratio is ~120% if i strip out the current account deficit and current stimulus

if gold was allowed to act naturally as the measure of constant purchasing power its been on long term basis for 5000 years - that would support a
USD gold price of approx $4000US base price, when expressed in devaluing US fiat

(ie 100x 1947 gold price to reflect inflation +~20% to reflect the net negative value of US dollar notes in implied economic backing. arguably that latter should be a logarithmic relationship not a straight line ie higher % debt vs income over 100% more exponential default risk becomes. but im playing nice here. Alternatively I could just ignore the gdp and use the debt as a proxy - given thats the real measure of erosion and given its 100+% at start and current. Which would be $250B to ~$26.5T per current or ~$3600 base USD gold price)

and thats vs when US gold price was artificially fixed by US govt to supress gold price as debt rose due to ww2.
Im only using 1947 as thats where US FRED gdp numbers are reported to

there are plenty of sites that will give you a calculation vs historic prices. but the people running these systems arent looking to support a 'fair value' gold price - so until the system changes I think thats a misdirect

i think this gives a window into how JP Morgan would be calculating what they regard as whether they march the paper price higher or lower over a given time period - but always with a view to big inflection points where they think real US gdp will expand (ie gdp - inflation) and real debt/gdp ratio stabilise or contract

which is why precious metals act opposite to most markets - they run behind instead of in front of the obvious economic shifts and trends

hence why they ramp so hard at those times when there are big expansions in the real debt/gdp ratio beyond what was expected

which is why i think short term there's likely a big move in USD gold and silver price coming - because inflation is rising at same time as debt

but that debt growth should drive gdp growth later - so likely a big spike before a pull back as the bankers hope to see gdp outpace debt

though if inflation rate above gdp growth proved systemic not transitory - then the spike would turn into a new higher price gestalt for gold/silver

sunday musings.