A Ounce of Gold Can Still Buy… (Part 2)
Another Look at Gold’s Purchasing Power
A month ago we posted a comment about preserving your wealth with the purchasing power of gold.
Now we’ll refresh your memory and add to the story.
At the signing into law of a Florida bill recognizing gold and silver as legal tender, the bill’s sponsor, Representative Doug Bankson, offered this illustration of gold’s purchasing power.
“If you bought a home in 1979, the average cost was $75,000; those were the days,” said Rep. Bankson. “If you bought that same home, that same product, now it would be $531,000. However, if you had bought that in gold in 1979, it would’ve been 268 ounces. Today, if you bought that home, 268 ounces. Why? Because it’s a tangible thing that has true value.”
It’s a great example. We agree with Bankson’s core argument—that gold retains purchasing power better than fiat currency, since the US dollar has lost over 90% of its value since 1971.
But Bankson understates the case for gold.
Today 268 ounces of gold would be worth closer to $900,000, much more than the current $531,000 value of the home. Today, it takes fewer ounces (159–160) due to gold’s price rising faster than home prices since 1979. This aligns with historical trends: gold’s value has surged (up 41.28% year-over-year as of July 2025), while home prices, though rising, have not kept pace with gold’s appreciation in recent years.
One more purchasing power example, this one from Bill Bonner, Bonner Private Research:
A Ford F-series pickup — the workingman’s wheels — cost $1,390 in 1950. Adjusting to official inflation figures suggests a price today of about $17,000. Instead, the cheapest F-150 you are likely to find will be about $40,000.
Yes, it is a better truck. Thanks to tech improvements. But new materials and new tools should have made them cheaper to build, too.
So rather than rely on BLS figures, let’s look at it in terms of gold. US GDP has risen 90 times since 1950. But the price of gold is up 82 times. In other words, in gold terms, US output — including the phony output — has scarcely increased over the last 70 years.
And in terms of GDP per person — up 40 times since 1950 — it has actually fallen in half.
But it took 33 ounces of gold to buy an F-100 pickup in 1950. Today, it takes only 13 ounces. In other words, the real economy – measured in gold – cut the price of a pickup truck in half. But the fake economy made them twice as expensive.
Bonner asks, where does that leave us?
We think you know that answer: You’re better off with gold!