Gold trades at $1,660.60 per troy ounce. Aluminum trades at $1.1259 per pound. There are 14.5833333 troy ounces in a pound. The current gold to aluminum price ratio is therefore 21,509 to 1.
Gold continues to be more and more expensive compared to aluminum.
747 Fun Facts
A 747-400 consists of 147,000 pounds (66,150 kg) of high-strength aluminum.
Selling just 6.83 pounds of gold will now allow you to buy all the aluminum needed to make a 747-400.
When are we going to stop inflating bubbles? The world may never know.
See Also:
Gold to Aluminum Price Ratio
Source Data:
USGS: Historical Mineral Prices
Kitco: Precious Metal Spot Prices
Kitco: Base Metal Spot Prices
If you are bullish on gold because the dollar is heading to zero then one would think that you should definitely be bullish on aluminum. Just look how historically cheap it is compared to gold.
ReplyDeleteOn the one hand, being bullish on aluminum might not be such a great plan if we slide into Japan's deflationary mess.
On the other hand, if we slide into Japan's deflationary mess then how is the dollar heading to zero?
Just looking for a consistent argument. That's all.
Insights like this can only be found here.
ReplyDeleteCheers!
JzB
Jazzbumpa,
ReplyDeleteThanks.
I'm mainly just trying to show how dangerous and distorted our economy is.
Nothing is what it appears to be. There is plenty of risk out there for everyone (including gold bugs and me).
It is certainly not my intention to convince readers to buy fleets of 747-400s at a time of $90+ oil.
That said, some extra aluminum foil for an extended pantry (for personal use) might not be such a bad plan. I've done it. At least I won't require a greater fool to sell it to someday.
In my opinion, we won't hyperinflate unless aluminum prices rise. And isn't that supposed to be the ultimate reason to own gold?
Mark,
ReplyDeleteAluminum looks tasty at these levels, but guess what the world's Central Banks are buying? Mexico bought 100 tons a few months ago, and those idiot central bankers in Korea just bought some.
The guys who can create money from thin air buy up gold and list on their balance sheet. I don't make the crazy rules, I am just forced to live by them. The Treasury holds 8,000 tons.
The US has decided to accelerate up the exponential debt curve without increasing taxes or reducing spending much. Europe is sinking in debt quicksand.
My exit will be when it looks like a new system is being put in place to rise from the ashes of the previous one. I'll keep 4 ounces so I can bribe my family onto the last flight out of the US to Vietnam.
disclosure: long gold
P.S. I love your anti-gold posts because they challenge my position which is good for me whether I turn out to be right or wrong.
P.S.S. Why does gold do well in deflation?
ReplyDeleteBecause as overextended credit goes bad, and starts defaulting, which is deflationary, money seeks a safer haven at lower levels of the Exter pyramid. Sovereign debt, until that goes bad, then cash, then....well, you know.
Mr Slippery,
ReplyDeleteJust a reminder that Gordon Brown was selling gold when gold was at its lowest. Using hindsight, that was the best time for us to buy. I'm therefore generally not impressed with the ability of governments to understand value.
In my opinion, our sovereign debt going bad is the same thing as saying hyperinflation. As you say, that would certainly make aluminum tasty. That might just be my stomach talking though. I love baked potatoes. ;)
We too have stocked up on Al foil. If I'd known how to buy gold back then, perhaps I'd have stocked up on Au coins at the Brown moment. Ah well.
ReplyDeleteP.S. at the moment we're speculating on Ag ETFs; as in Silver, not Agricultural. Whether my nerve will hold I don't know: the profit isn't real until I sell.
dearieme,
ReplyDeleteEvery baked potato has an aluminum lining. ;)