Correlation between Gold and Inflation

[Gumby]

My initial logic towards gold was, "Why on earth would I want to have a luxury item when the world is falling apart all around me... that's exactly when luxuries don't matter."  Immature, but probably quite common.

I do have a whole new respect for it at this point, and your guys' insight is really amazing to hear.  Sometimes I get in a mood where I just don't like it, then MT does a post in Olde English/ Yoda speak and his words alone remind me what gold truly represents.  Funny, my initial post was to tell the TC why gold is the only thing that works in the portfolio, then I get in a back-and-forth arguing that it has no intrinsic value.

Interesting conversations, gentlemen.

Wars have been waged over gold, and people have died seeking its fortune. I think the problem is that you keep thinking of it as a luxury item, but you're not thinking about why it's a luxury item.

You're also confusing intrinsic and usefulness. When the world is falling apart, cigarettes, guns and ammo will certainly have useful value (not intrinsic value). Gold has intrinsic value because of it's properties — which led to its historical allure. But, Gold probably has very little useful value other than it's own natural preservation, beauty and elemental characteristics for minting coins. Preservation of beauty, if you will.

Here, take a look at the following list of Golden (color) in Human Culture. Gold is clearly historically valuable due to its color, shine, weight, malleability, rarity, beauty and its ability to preserve that beauty forever. It's intensely desirable, and therefore, symbolic of power. That pattern of value has lasted thousands of years even when the world was falling apart (through wars, famine and death) and spanned entire cultures that were even isolated from each other. So, the natural properties of gold are also very useful in terms of creating desirable currency. Beautiful currency.

It's been said that Economics is the study of desire and resources. Think about how Gold fits into the balance of desire and resources.

When you think about it, the earliest currencies got their intrinsic value from their desirable compositions. Somehow, that everlasting desire for beauty has outlasted even the most horrific and challenging eras over the course of human history.

[MediumTex]

So, the natural properties of gold are also very useful in terms of creating desirable currency. Beautiful currency.

I think part of the confusion surrounding gold arises from the fact that many people who speak about it don't actually own any.  I guarantee you that this discussion will have a different flavor to it if you have a one ounce gold eagle coin sitting next to your computer as you type. 

When you hold gold in your hand for the first time and really meditate on its significance, a funny thing happens.  First, you may be completely underwhelmed that this shiny piece of metal could be considered such a big deal.  But then you begin to think about how that piece of gold will never corrode, never decay, never deteriorate--in sum, gold will stay the same as the rest of the world changes.  As this sinks in, the concept of a durable store of value begins to have a bit more texture to it.

Part of our problem is that we live in a world not just of abstractions, but of many layers of abstraction.  Thus, I'm not "MediumTex", I'm a person named Mike who goes by MediumTex in this forum.  But when I say I'm Mike, what does that mean?  It's a shorthand for all that is me, but what is that?

We have a similar problem with investments--we are accustomed to investment instruments being elaborate abstractions that people have agreed represent certain claims or interests in underlying assets.  Often these underlying "assets" are themselves abstractions (think about what a bank's "assets" are).

With gold, there is certainly an element of abstraction--I don't personally want the gold for my own use (I'm not a jeweler or dentist); I simply want it because I believe that under some circumstances other people will want it more than they do today and I would like to benefit from this possible change in value in the future.  There is, however, a much smaller component of abstraction in gold than in other investment instruments, and this is what people are referring to when they say gold has no counter party risk and so forth.

[MediumTex]

Yeah, I think the definition of intrinsic can have different levels of meaning... my philosophy class tested that word's meaning to the n'th degree.

So if gold had all of the exact same qualities that it has, which I'll admit make for a perfect currency given the standard characteristics, then you come to the next question: ok, it's rare and has all these great qualities.  What kind of value should be attached to that? 

Historically, I always wonder how much of that is luxury value (which is ok, but it's important to me to work through the logic/math here).  So that's where I got the puke-green color exception.  Instead of gold being a "gold" color, if it were puke-green or some disgusting looking color, one would wonder whether it would have become a currency or not?

MT... any insight on that?

Are you asking me whether gold would be perceived and valued differently by humans if it looked different?  I don't know, but I would say it probably would be perceived and valued differently, but it's obviously an irrelevant (though interesting) question since gold is what it is, and our valuation of it must be based on that.

One of the things that jumped out at me in von Mises' Human Action was the concept that while we can conceive of the existence of other non-human forms of logic that would lead to different conclusions about the world, the fact is that we as humans are bound by the logic of the human mind that we all share.  Thus, I can speculate about an infinite number of alternate realities, but the reality in which I find myself will not change (reality being that which I bump into when I don't look where I am going).

I think part of the intuition we have about gold is that there is an alternate logic that says it shouldn't be worth anything.  The problem is that this logic is not rooted in the civilized human world that we inhabit.  The truth about people is that in almost any configuration you will find a peculiar mix of rational and irrational beliefs.  The individual who holds these beliefs does not, however, see it that way.  In fact, people are normally most likely to be willing to kill each other over irrational beliefs. 

Is it irrational to place the value on gold that we do?  I don't know, it might be, but so what?  Who cares if it is a rational or irrational logic that leads to gold being considered valuable?  The fact is that for whatever reason and for thousands of years many aspects of human civilization and associated belief systems have changed, but gold has remained the same, fluctuating within a fairly narrow band of what we are calling "intrinsic" value.

I think the important question about gold is not whether it is rational or irrational to view it as having value, but rather whether gold is likely to stop being viewed by other people as being valuable in the future.  I think that Gordon Brown got confused about this question and sold most of Britain's gold around 2000 at about $250 per ounce.  Was this rational?  I don't know, but the more important question is whether it would have been better not to do this, even if it may have been "rational" by some idealistic (and ultimately non-human) form of logic.

Part of the art of living in the world as it is is accepting the premises upon which it is based for operational purposes (you can question them all you like intellectually).  Thus, I don't know why exactly people respond better to me when I am nice to them (I'm the same person whether I am nice or not), but they do respond better to me when I am nice to them, and thus I have gotten in the habit of being nice to people, not because I am a good person necessarily, but just because I accept that this is one of the methods of making my way through life that is likely to lead to the least future regret.  You know what else?  I like it when people are nice to me as well. 

There is a certain liberation in being able to accept the world as it is without feeling the need to judge it or lament that it is different than it would be if you made it.  One more elegant design element in the PP approach to investing is that it allows you to take the world as it is and profit from it.  Thus, when interest rates are lower than they "should" be, you will profit.  When gold is higher than it "should" be, you will profit.  When stocks are reflecting irrational exuberance, you will profit.  And when everyone is pooping in their pants because they are so scared and want to own nothing but cash, you will profit.

[Gumby]

There is a certain liberation in being able to accept the world as it is without feeling the need to judge it or lament that it is different than it would be if you made it.

Brilliant discussion. Just curious, but is the above statement derived from some of HB's thoughts and writings about Libertarianism?

One more elegant design element in the PP approach to investing is that it allows you to take the world as it is and profit from it.

It would seem that HB's world view played an important role in discovering the Permanent Portfolio.

[MediumTex]

There is a certain liberation in being able to accept the world as it is without feeling the need to judge it or lament that it is different than it would be if you made it.

Brilliant discussion. Just curious, but is the above statement derived from some of HB's thoughts and writings about Libertarianism?

One more elegant design element in the PP approach to investing is that it allows you to take the world as it is and profit from it.

It would seem that HB's world view played an important role in discovering the Permanent Portfolio.

Most of what I wrote was right out of Harry Browne's mouth.

I think that Harry Browne was a philosopher first, and an investment advisor second.  This orientation allowed him to provide investment strategies that rolled up into a much broader worldview.

To a large degree, Harry Browne's thinking was sort of a working man's distillation of von Mises' much more elaborate (and sweeping) analysis of the human condition.  Von Mises was a philosopher first, and an economist second and I think Harry Browne simply recognized the deep meaning and truth in von Mises' writings and put his own spin on them, which I think provided for many practical applications of what is otherwise a somewhat esoteric set of ideas.

For a fascinating window into what the operating system of modern humanity looks like, I recommend von Mises' Human Action (it's available free online).  The scope and subtlety of von Mises' work is staggering.  His arguments are like narrative descriptions of a vast set of blueprints for an almost infinitely complicated system (the human mind).  He was a truly brilliant person.

[rickb]

So if gold had all of the exact same qualities that it has, which I'll admit make for a perfect currency given the standard characteristics, then you come to the next question: ok, it's rare and has all these great qualities.  What kind of value should be attached to that? 

How would you describe the "value" of anything?  There's a nice book by Vicki Robin and Joe Dominguez called "Your Money or Your Life" which suggests thinking about what you buy in terms of hours of your life needed to make the amount of money required.  In recent times, an ounce of gold has been valued about the same as the cost of a good men's suit.  I think what this means at a fundamental level is that the total effort to create a good suit (including the effort to create all the components, like the cloth) is about the same as the total effort to dig an ounce of gold out of the ground (including the effort to find the ore in the first place, etc.).  You might think this means as mining technology advances the value of an ounce of gold should go down, but there's only a finite supply of gold in the earth's crust and finding it is becoming progressively more difficult.

One of the challenges of using a metal/commodity when minting coins in fiat currencies, is that the perceived intrinsic value of the metal/commodity can often become greater than the face value of the coin itself. Despite the efforts of legal tender laws, governments are constantly finding ways to reduce the intrinsic value of the minted coins. Even the composition of the penny has changed over time due to the higher perceived intrinsic value of copper. in the 1870s, 1-Yen coins were a gram of gold — now they are aluminum.

Not quite.  Metals, like gold, have an actual, not just perceived, "intrinsic" value essentially related to their rarity - quite unlike fiat paper money which (unless it is backed by a fixed amount of metal) has the intrinsic value of a small piece of paper, regardless of what number is printed on it.  Considering fiat currencies backed by nothing to be "money" is foolish in the extreme.  You're trading hours of your life for IOUs that don't have any guaranteed value whatsoever.

[moda0306]

I think when I've been saying "intrinsic value" I mean "useful vale."  The Mona-Lisa has intrinsic value in that people recognize it as being valuable, but it has little useful value.

I used to liken having an ounce of gold as a hedge for disaster as being akin to having a fine piece of art to hedge for disaster, and that I'd much rather have a few guns, a generator, canned food, etc. for the same $1,300 it would cost to get me one ounce of a yellow metal.

That was what I meant by gold having no intrinsic value.

[MediumTex]

I think that all claims about useful value, intrinsic value, objective value, absolute value, real value and any other kind of value still comes down to the basic truth about the valuation of anything:  Value is a function of the quantity available at a given point in time and the preference people have for the item relative to everything else that is available.

I can't think of anything that has a value that is not contingent upon the circumstances under which it is being offered.

Even the value of one's own life (presumably the highest value item to any individual) fluctuates based upon conditions.  I may value my life higher than most anything else, and yet risk it to help save someone else's life under some conditions.  The person who commits suicide probably valued their life higher than anything else for most of their life, but then ran into a bad stretch and this value fell to near zero.

I think that there are interesting arguments for why something should be worth a certain amount, but that doesn't mean that you're guranteed to find a buyer at that price at a given point in time.

[Wonk]

Gold rises when real interest rates are negative.   Gold falls when real interest rates are positive.  TBV, gold fell after 1980 despite high inflation because The Fed got ahead of it by raising rates high enough to turn real rates positive again.

http://www.tradersnarrative.com/long-te ... -1513.html

Edit: was having some problem with other chart, here is a replacement.
http://goldprice.org/30-year-gold-price-history.html

These charts do not show strong negative correlation between real interest rates and gold. Can you elaborate a bit?
I could not find I way to supper impose the two charts.

There are a few links below that will explain the relationship in better detail:

http://www.gold-eagle.com/editorials_03 ... 02503.html

http://www.dailyreckoning.com.au/why-ch ... 008/04/16/

An important point to be made is that most asset prices (including gold) move like a giant pendulum.  When motion gets shifted in a particular direction, it becomes difficult to change quickly into the other direction. 

When times are good (secular bull in equities), currencies are stable, productivity is high and earnings are healthy.  Inevitably, when investors get overly optimistic, prices will revert to the mean.  In a gold-based system, investors will flee overvalued assets for the safety of gold.  In a fiat system, the central bank is free to debase the currency in order to keep asset values high.  Investors realize that negative real interest rates are hazardous to their wealth, so they increasingly flee the offending currency for the safety of gold as an alternative currency. 

When the pendulum swings back and real interest rates are again positive for a sustained period, investors move back into the currency as there is more incentive to get paid in said currency than to have to pay storage and insurance costs to hold gold.

[Gumby]

I agree with MediumTex. It really does come down to timing. And he's also right that the answer to this question does indeed lie within the Human Action. If you download the book, and do a quick word search for "gold" you will find every imaginable argument for (and against) gold reasoned with sound logic.

There's even a section discussing why gold can be more valuable than iron, even though iron is more useful than gold (See page 121 of Human Action).

The valuations and choices that result in the exchange ratios of the market do not decide between gold and iron. Acting man is not in a position in which he must choose between all the gold and all the iron. He chooses at a definite time and place under definite conditions between a strictly limited quantity of gold and a strictly limited quantity of iron. His decision in choosing between 100 ounces of gold and 100 tons of iron does not depend at all on the decision he would make if he were in the highly improbable situation of choosing between all the gold and all the iron. What counts alone for his actual choice is whether under existing conditions he considers the direct or indirect satisfaction which 100 ounces of gold could give him as greater or smaller than the direct or indirect satisfaction he could derive from 100 tons of iron. He does not express an academic or philosophical judgment concerning the “absolute”? value of gold and of iron; he does not determine whether gold or iron is more important for mankind; he does not perorate as an author of books on the philosophy of history or on ethical principles. He simply chooses between two satisfactions both of which he cannot have together.

For brevity, I glanced at the study guide on mises.org and found this useful passage:

The monetary component of the demand for money is clearly due to its exchange value; people are willing to labor for an hour in exchange for a certain quantity of gold, because they believe that they can obtain food, shelter, and other items later on in exchange for the gold. But this seems to argue in a circle: it says that the money has marginal utility because it possesses exchange value, while it explains the exchange value of money by reference to its marginal utility!

Mises showed the way out of this impasse. To explain the purchasing power of money right now, we rely on people’s expectations about the future purchasing power of money. And these expectations in turn come about from the experience of money’s purchasing power in the recent past. In short, the purchasing power of money today is grounded on the expectations of its purchasing power tomorrow, where this forecast is based on its purchasing power yesterday. The economist is thus not saying, “We explain the exchange value of money by reference to the exchange value of money,”? but rather, “We explain today’s exchange value of money by reference to yesterday’s exchange value of money.”?

Mises also deals with the next objection, which is that the new argument leads to an infinite regress. This too is a faulty claim, because the process stops when the exchange value for the money is traced back to the days of direct exchange. At that point, the commodity was demanded solely for its direct use in production or consumption, when there is no question of the applicability of marginal-utility theory.

There's a whole chapter in the Human Action on the Gold Standard (page 417). Here was one interesting passage:

No government is, however, powerful enough to abolish the gold standard. Gold is the money of international trade and of the supernational economic community of mankind. It cannot be affected by measures of governments whose sovereignty is limited to definite countries. As long as a country is not economically self-sufficient in the strict sense of the term, as long as there are still some loopholes left in the walls by which national governments try to isolate their countries from the rest of the world, gold is still used as money. It does not matter that governments confiscate the gold coins and bullion they can seize and punish those holding gold as felons. The language of bilateral clearing agreements by means of which governments are intent upon eliminating gold from international trade, avoids any reference to gold. But the turnovers performed on the ground of those agreements are calculated on gold prices. He who buys or sells on a foreign market calculates the advantages and disadvantages of such transactions in gold. In spite of the fact that a country has severed its local currency from any link with gold, its domestic structure of prices remains closely connected with gold and the gold prices of the world market. If a government wants to sever its domestic price structure from that of the world market, it must resort to other measures, such a prohibitive import and export duties and embargoes. Nationalization of foreign trade, whether effected openly or directly by foreign exchange control, does not eliminate gold. The governments qua traders are trading by the use of gold as a medium of exchange.

The struggle against gold which is one of the main concerns of all contemporary governments must not be looked upon as an isolated phenomenon. It is but one item in the gigantic process of destruction which is the mark of our time. People fight the gold standard because they want to substitute national autarky for free trade, war for peace, totalitarian government omnipotence for liberty.

[Lone Wolf]

What a top notch discussion.  I just wanted to add a couple more thoughts on the value gold brings to the table (and why gold shouldn't be viewed as any kind of perfect "inflation tracker", particularly during mild inflation.)

There is a basic human need for security.  One thing we all want to protect is our possessions and financial future.  Even if we don't read Browne reminding us of this in "Fail-Safe Investing", we intuitively realize that the time we spend laboring to earn money is precious and irretrievable.  The idea of it being wiped away, when you truly think it all the way through, is utterly horrifying.

In stable times, stocks, bonds, and dollars can do a good job of protecting value.  But when something, anything threatens the ability of these instruments to preserve value, this basic human desire to store value does not go away.  In times of mild inflation this threat doesn't seem urgent (and the idea often strikes people as quaint.)  But when the printing presses are churning worldwide or inflation is soaring into the double digits, it is no longer clear that dollars and dollar-denominated instruments will fulfill this role.

A criticism of gold that you often hear is that it "just sits there" rather than paying you dividends.  But that's in fact the beauty of it.  It will "just sit there" and only sit there, not degrading or corroding or shrinking or defaulting or burning up or entering bankruptcy or failing to fulfill its obligations.

[Storm]

I find it very interesting that throughout almost all known human history, the amount it costs to buy something in gold has remained the same.  The average well-built house has cost about 100 ounces of gold for hundreds of years.  This speaks volumes about it's reliability as a store of money.

Like all of you, I aspire one day to have 100 ounces of physical gold for a rainy day fund.  You never know when you might need to leave the country and buy a house somewhere else.  They may not take fiat currency, but I can pretty much guarantee you they will take gold.

[MediumTex]

The struggle against gold which is one of the main concerns of all contemporary governments must not be looked upon as an isolated phenomenon. It is but one item in the gigantic process of destruction which is the mark of our time. People fight the gold standard because they want to substitute national autarky for free trade, war for peace, totalitarian government omnipotence for liberty.

Gumby,

That last passage from von Mises was so beautiful I almost got teary.

I heard a rumor, and this is just a rumor, but the rumor is that one of Oprah's upcoming book club selections is going to be Human Action.

[MediumTex]

Even if we don't read Browne reminding us of this in "Fail-Safe Investing", we intuitively realize that the time we spend laboring to earn money is precious and irretrievable.  The idea of it being wiped away, when you truly think it all the way through, is utterly horrifying.

If there is any one idea that animates my desire to share the PP strategy with people, it is the one above.

As I have mentioned before, I work in the design and operation of retirement plans and seeing people make poor decisions as a result of an overall system that is not well designed is heartbreaking to me.

The basic problem is that conventional wisdom asks regular people to speculate and basically bet their retirement years on the idea that a certain economic configuration will be in place when they are ready to retire.  If this doesn't turn out as expected, there really isn't any plan B.

I believe the PP is a perfect retirement saving strategy because it allows you to focus on your work and not worry about what sort of future will unfold and what effect it may have on your hard-earned savings.  It also allows you to tune out the box of parrots on TV.

[LNGTERMER]

There are a few links below that will explain the relationship in better detail:

http://www.gold-eagle.com/editorials_03 ... 02503.html

http://www.dailyreckoning.com.au/why-ch ... 008/04/16/

An important point to be made is that most asset prices (including gold) move like a giant pendulum.  When motion gets shifted in a particular direction, it becomes difficult to change quickly into the other direction.  

When times are good (secular bull in equities), currencies are stable, productivity is high and earnings are healthy.  Inevitably, when investors get overly optimistic, prices will revert to the mean.  In a gold-based system, investors will flee overvalued assets for the safety of gold.  In a fiat system, the central bank is free to debase the currency in order to keep asset values high.  Investors realize that negative real interest rates are hazardous to their wealth, so they increasingly flee the offending currency for the safety of gold as an alternative currency.  

When the pendulum swings back and real interest rates are again positive for a sustained period, investors move back into the currency as there is more incentive to get paid in said currency than to have to pay storage and insurance costs to hold gold.

Much appreciated Wonk, thanks for this great insight to the valuation of gold. I did figure out that it does have a negative correlation-not perfect but it is there- to the treasuries, but this shows the real reason as to why.

Moda I think this- In addition to all the wonderful above responses- answers your question of the value of gold.

[KevinW]

Others have covered this pretty thoroughly but I wanted to respond to one point, regarding the definition of "money."

to me it seems like circle logic to say gold is money because it has intrinsic value because it is money...

This seems like circular logic because you are equating "value" with "money," but those are not the same thing!

"The Establishment" promulgates the belief that dollars are a unit of measure for economic value, in the same way that gallons are a unit of measure for volume.  People become accustomed to thinking that one share of McDonalds equals $75, one McDouble sandwich equals $1, one hour of labor at McDonalds equals $8, etc.

However, "money" is actually a man-made tool that facilitates division of labor.  Before money existed, people had to barter, which was inefficient and impractical.  Humans invented money, which is some kind of token that's widely accepted in place of barter.  You trade your labor for money tokens, then trade those tokens for the goods and services that result from others' labor.

All of human activity operates in a "general market" where people are constantly making exchanges.  You might trade 8 hours of your life for $100 in wages, 2 hours for watching Romancing the Stone on TV again, 15 minutes taking a survey for a Starbucks gift card, etc.  Most of these exchanges involve money tokens because money is so much more convenient than direct barter.

Money is a tool that lets us get more from our time spent laboring.  As long as people value their finite time on earth, there will be demand for something to use as money.  The element Au (gold) has physical properties that make it function very well in the role of money.  So, until technology invents some new thing that is an overwhelmingly better money than gold, which is going to be very difficult, some people out there will choose to use gold as money.

***

As an analogy, humans need shelter.  People invented the man-made tool of houses to solve that problem.  Wood is a material that can be turned into houses very effectively due to its physical properties.  Pretty much every culture that had trees available settled on building houses out of wood.

We now have metals, plastic, and concrete with which to build houses.  They are technically superior in many cases.  However, wood still has value as a building material.  Sometimes wood is still the best choice from an engineering perspective.  Some people prefer traditional methods for their own reasons.  Some people prefer the aesthetics of wood as a luxury item.  Some people are skeptical about the sustainability of the industrial infrastructure necessary to manufacture metals, plastic, and concrete, and prefer not to depend completely on that infrastructure.

Can you see how the value of wood might fluctuate relative to other materials as conditions change?

Does there need to be any direct link between how you want your house to be built, and whether you invest in wood?

How likely is it that wood would cease to have any value to anyone anywhere?

[Wonk]

As a side note to this discussion, one of the things I'm still trying to reconcile is how I feel about the use of inflation.  In a puritan way, I'd like to see a return to a proper gold standard where purchasing power is protected.  On the other hand, as the U.S. republic has been turned into a democracy over the last 200 years, inflation may serve a purpose in a Machiavellian way.  

A majority of voters elect politicians who promise them benefits that are largely paid for by someone else.  I don't think I'm being overly harsh in saying a majority of voters also happen to be financially illiterate and have no idea how to protect their purchasing power from the inflation tax.  So one way to give the voters what they want is to make them pay for their programs and benefits through inflation.

Those who know how to beat the inflation game get to keep their purchasing power intact while those who vote for reckless spending ultimately pay their own tab.  Of course, it's never as black and white as this.  There will always be collateral damage and good people will still be caught in the crossfire.  For instance, the peasants in 2nd and 3rd world countries who exchange their widgets for dollars, euro, etc don't even get a vote, but their purchasing power is stolen anyway.  

I suppose I just need to accept the fact that we live in an imperfect world and from a practicality standpoint, it seems like the inflation game may be the best fit to compensate for human nature.

As Joseph de Maistre said so eloquently:

"The people get the government they deserve."

[Pkg Man]

A follow up on another post I made in another thread that really belongs here.

http://inflationdata.com/inflation/infl ... lation.asp

The original link I posted is here http://host.madison.com/ct/news/opinion ... e1884.html,
which is an article by Martin Feldstein about gold and inflation.

[Greg]

First off, even though I am out of school now, I feel as though whenever I come onto this forum during the course of my day that I learn something. The forum is like a living economics/philosophy book that constantly updates itself and helps me to understand the world a little bit better and I'd like to thank each and every one of your for contributing to this creation.

Secondly, for those interested, here's a great video on subjective value of "intrinsic" value as to why one object is worth far more to someone than to another. From a "useful" value standpoint, both serve the exact same purpose, but both of the shirts have very different intrinsic values to different people.

Again, I'm very lucky to have found this forum. It is really an eye-opener and also allows me to actually speak and learn about a lot of these items which otherwise I wouldn't get to (don't have many people to speak about this stuff with other than my father). For that, I thank you again.

http://www.learnliberty.org/content/subjective-value-0