Sunday, May 23, 2010

Gold to Aluminum Price Ratio

Gold trades at $1,180.60 per troy ounce. Aluminum trades at $0.9068 per pound. There are 14.5833333 troy ounces in a pound. The current gold to aluminum price ratio is therefore 18,987 to 1.

747 Fun Facts

A 747-400 consists of 147,000 pounds (66,150 kg) of high-strength aluminum.

Selling just 7.75 pounds of gold will now allow you to buy all the aluminum needed to make a 747-400.

Although I did ride gold and silver from 2004 to 2006, I have no interest in owning either gold or silver at these prices.

I will repeat what I said in my Silver to Aluminum Price Ratio post (see link below).

I've mentioned in the past that if I was running my portfolio like a hedge fund then I would buy toilet paper and aluminum foil and sell precious metals.

Here's what 1970s stagflation looks like.

That is not what we are seeing though. This is.

February 16, 2010
Technical Announcement: U.S. Minerals Sector Declined in 2009

Gold was one notable exception to the downward trend in metal prices, reaching an all time high of $1,215.21 per troy ounce in early December 2009. Iron ore was among the largest to decline and decreased by nearly 50 percent in production quantity and value over the last year.

I remain deflationary.

See Also:
Silver to Aluminum Price Ratio

Source Data:
USGS: Historical Statistics
Kitco: Gold
Kitco: Aluminum


G.H. said...

But, but, but...China, China rulz -

November 21, 2005 - WooHoo, Jim Rogers saw it coming before the rest of us...

"In the next 20 years, China needs over 3,000 new aircraft, being one of the biggest civil aviation markets in the world. In the past 33-year cooperation, Boeing has been devoted to helping China's airline companies in expanding their fleet..."

January 20, 2010 - Holy Crap, wholesale ship finished aluminum to China, NOW!

"Aircraft to be acquired

20 Airbus A320 series aircraft


According to the information provided by Airbus SNC, the catalogue price of an Airbus A320 aircraft is US$76.9 million. Such catalogue price includes price for airframe and engine."

May 18, 2010 - Better outsource US pilots to China...

"Pilots are a scarce resource in China. As a result of the booming economy, the country's civil aircraft total reached 1,259 in 2008, 51% up on 2005, far exceeding the rate at which China can train pilots."

P.S. - word ver. "blimp". I'm thinking China might as well be building them too.....out of aluminum. Maybe they'll get the hint when they can't get them off the ground.

Stagflationary Mark said...


Air China 981

G.H. said...

From the last link:

"In the absence of any other source, private airlines have to lure pilots from state-owned carriers by offering them attractive salaries, resulting in high costs and frequent labour disputes. And, while the CAAC introduced new rules in 2005, ordering compensation fees of 700,000-2.1 million yuan to be paid to original employers for a pilot to job hop, it did little to address the root of the pilot shortage problem. Pilots are still largely seen as the property of individual airlines. China's private airlines will continue to face a dilemma in a highly restrictive pilot market."

Translation: It's very nearly possible that the pilot in that video could someday soon be given a "retention bonus" (remember the I.T. craze of the late '90's) so that he won't jump to a more lucrative position at a private carrier. And even if the pilot does jump, the original employer will simply receive compensation for their trouble.

See, in China, everything's a win-win. Or is that wen-wen?

Stagflationary Mark said...


It might be a Zugzwang-Zugzwang situation?

It describes a situation where one player is put at a disadvantage because he has to make a move – the player would prefer to pass and make no move. The fact that the player must make a move means that his position will be significantly weaker than the hypothetical one in which it were his opponent's turn to move.

Must buy plane.
Can't buy pilot.


mab said...

Great chart! It clearly proves that gold has been undervalued for over a century.

And I doubt that Gold will remain under-valued forever. The upward sloping chart and recent spike show that "investors" are taking notice. The time to buy gold is now before everyone realizes what a bargain it is at $1200/oz.

Buy high and hold forever. What could go wrong? Besides, if the price drops you can simply institute your own personal mark to fantasy accounting.

Stagflationary Mark said...


Compared to aluminum, gold's price is clearly being oppressed.