Gyroscopic Investing

Several recent threads set me to thinking about the long-term decline in the value of the dollar (and other fiat currencies). Does anyone here on the forum price the four PP assets in terms of gold, not dollars? There's an interesting website pricedingold.com that shows you the value of, say, an S&P 500 index fund or a long-term treasury fund (e.g., TLT) in grams of gold. I'm wondering if this would change the rebalancing bands or anything else about the PP methodology. Did Harry Browne ever talk about this on his radio show?

Never done it, but a cool idea. Try it and tell us about it

Why not price everything with S&P 500 index?

Mike Maloney and Peter Schiff have talked about this practice quite extensively in several of their appearances. It's not as exotic of an idea as the everyday person might believe.

I think it provides insight, but we just have to be careful since the price of gold can be influenced by many different factors outside of the cost of living.

stpeter wrote: ↑Fri Apr 10, 2020 6:25 pm ...
Does anyone here on the forum price the four PP assets in terms of gold, not dollars?
..

Ha!
Not the assets, but I used to think about the equivalent of things like my home in ounces of gold. And my portfolio total.
Problem is, I think of it in US$ first and then convert to gold using the spot price.

Maybe I should be averaging a few currencies since it is the dollar that's moving, more so than gold.

dualstow wrote: ↑Sat Apr 11, 2020 1:14 pm

stpeter wrote: ↑Fri Apr 10, 2020 6:25 pm ...
Does anyone here on the forum price the four PP assets in terms of gold, not dollars?
..

Ha!
Not the assets, but I used to think about the equivalent of things like my home in ounces of gold. And my portfolio total.
Problem is, I think of it in US$ first and then convert to gold using the spot price.

Maybe I should be averaging a few currencies since it is the dollar that's moving, more so than gold.

My asset spreadsheet shows totals in ounces of gold, in USD, and in Swiss Francs.

dualstow wrote: ↑Sat Apr 11, 2020 1:14 pm

stpeter wrote: ↑Fri Apr 10, 2020 6:25 pm ...
Does anyone here on the forum price the four PP assets in terms of gold, not dollars?
..

Ha!
Not the assets, but I used to think about the equivalent of things like my home in ounces of gold. And my portfolio total.
Problem is, I think of it in US$ first and then convert to gold using the spot price.

Maybe I should be averaging a few currencies since it is the dollar that's moving, more so than gold.

Thinking about it further overnight, I'm not sure it would make any difference for the permanent portfolio. While it can be interesting to measure house prices or the S&P 500 in ounces or grams of gold to maintain perspective (what everyone considers a record high ain't necessarily so), all we really care about is the core 4x25% ratio and 15%/35% rebalancing bands, which aren't affected by the unit of measure.

Exactly.

stpeter wrote: ↑Sat Apr 11, 2020 3:22 pm

dualstow wrote: ↑Sat Apr 11, 2020 1:14 pm

stpeter wrote: ↑Fri Apr 10, 2020 6:25 pm ...
Does anyone here on the forum price the four PP assets in terms of gold, not dollars?
..

Ha!
Not the assets, but I used to think about the equivalent of things like my home in ounces of gold. And my portfolio total.
Problem is, I think of it in US$ first and then convert to gold using the spot price.

Maybe I should be averaging a few currencies since it is the dollar that's moving, more so than gold.

Thinking about it further overnight, I'm not sure it would make any difference for the permanent portfolio. While it can be interesting to measure house prices or the S&P 500 in ounces or grams of gold to maintain perspective (what everyone considers a record high ain't necessarily so), all we really care about is the core 4x25% ratio and 15%/35% rebalancing bands, which aren't affected by the unit of measure.

Correct, however I did find the "priced in gold" concept useful for comparing costs between countries.

It also helped clarify gold was a reserve (store of value) and currency was the medium of exchange in our current system.

https://edelweissjournal.com/pdfs/Edelw ... al-017.pdf

https://web.archive.org/web/20120119083 ... gspot.com/

Pricing things in gold, while maybe useful for some type of comparison or analysis, isn't useful for real life. If you live in the US you buy things in dollars, if you live in Europe, Euros...etc. etc. Notionally speaking if gold was up 50% in dollars and down 50% in Euros and you are a US citizen you probably don't give a crap about the European price.