Monday, June 9, 2025

The U.S. Dollar and Delusions of Growth

(Clint Siegner, Money Metals News Service) Americans are accustomed to assets being priced in terms of Federal Reserve note dollars. It makes sense, of course.

The dollar is the currency of the realm. There is, however, a real problem with using it as a benchmark.

Government inflation statistics cannot be trusted. It isn’t easy to determine whether price gains represent appreciation of the asset or depreciation of the dollar.

Gold is an infinitely better store of value. That makes it a more useful standard against which other assets can be measured.

It’s an eye-opener to measure how key assets have performed with gold, rather than the dollar, as the benchmark.

Gold vs 10-Year Treasuries

The 10-year U.S. Treasury note has long been promoted as a “risk free” asset. This maxim is among the most dangerous and misleading ever uttered by Wall Street bankers and brokers. The secret to claiming 10-year Treasuries as “risk free” is that they are priced in dollars.

No matter how badly Treasuries perform, they hold up just slightly better than the dollar due to the pitiful yield.

Priced against gold, Treasuries have been a disaster. Buying 1 oz of gold in June 2015 cost around $1,180. That ounce of gold is now worth just over $3,300. The same $1,180 investment in the 10-year bond would be worth $1,500 today – less than half the value of the gold. That’s including reinvestment of interest.

Gold vs Oil

Oil remains the most vital commodity for powering the global economy. It has not performed well as an investment over the past decade. There have been modest gains relative to the dollar, but huge losses relative to gold.

West Texas Intermediate (WTI) crude was priced at $59.82 per barrel in June 2015. With gold at $1,180, the gold/oil ratio was 19.72. Today, the oil price is around $64.50, and the ratio is roughly 51. It now takes 51 barrels of oil to buy an ounce of gold.

The collapse of oil relative to gold is a complicated subject which involves increasing global production and other factors.

However, global GDP has reportedly grown at an average annual rate of 2.67% while oil production has risen just over 1% per year.

Based on the official data, demand should be outstripping supply, and oil prices ought to be rising. The gold/oil ratio suggests something is wrong with that data.

It’s a good bet that real economic growth is nowhere near as healthy as governments have been reporting.

Gold vs the S&P 500 Index

Stock prices fared much better than oil or Treasuries over the past 10 years. The S&P 500 Index was priced at roughly $2,100 in June 2015. The gold/S&P ratio was 0.56. Today, the Index is at $6,000, and the ratio is nearly unchanged at 0.55.

Not bad, except that in a healthy economy, stocks should significantly outperform gold. Instead, measured against gold, there is essentially no appreciation.

And if the window is extended to the past 25 years, the gold/S&P ratio climbed from 0.2 to 0.55. Gold dramatically outperformed stocks, even when reinvesting dividends.

Gold Tells the Real Story

There are lots of investors out there operating under the delusion that their investments are performing well. That delusion is only possible if assets are priced in dollars. If they measure performance against gold, the story could not be more different.


Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

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