A philosophical question on value

[A10]

I've long said that the value of goods hasn't changed, they just seem to cost more because the value of a dollar has diminished. I've used the example of how in the 1870's you could buy a shiney new Colt for a 20 dollar gold piece and, for the longest time, that held true. Nowadays though, a 20 dollar gold piece these days will get you 3 of the new Pythons.

So what changed? Has the true value of gold increased? Or has the true value of a Colt decreased?

Feel free to share pictures of any random Colts or gold pieces you may have!

 

[Onomea]

I think it has to do with demand in specific environments. E.g., the value of a glass of cold water when trekking in the Sahara desert, or a down coat in a snow storm in Antartica.

Here's a thought: Would a $20 1870 gold piece and a Colt from 1870, assuming similar condition, be of near conquerable market value today? I think probably so...

 

[taz666]

Probably took a month worth of work to earn that $20 double eagle back then.

 

[grover99]

Probably took a month worth of work to earn that $20 double eagle back then.

I read a lot of westerns and the regular ranch hand was paid $30 to $35 a month plus chow around 1875 or so.

 

[ISCS Yoda]

In reality, you cannot buy much with a $20 gold piece because nobody would know what to do with it.

they just seem to cost more because the value of a dollar has diminished.

That's pretty much the short definition for inflation.............

 

[sjmjax]

I'm the product of three generations in manufacturing.

We've seen the "cost" of production falling continuously over time.
Costs meaning the hours of human labor, the amount of raw material needed, the energy required to produce the end product.

Improved methods, better machines, and efficiency has significantly reduced these direct costs.

What has increased is taxes, insurance and regulatory compliance. But most importantly, our "money" simply isn't as valuable as it once was.

 

[M29since14]

I agree with Onomea. Gun buying by itself is basically a bit irrational for most of us. But we keep buying them. I can sort of justify owning four guns, maybe five. Beyond that, it gets just a bit mindless, financially, for me. Like I'd guess quite a few of us here, I can't afford and really am not too interested in truly "investment quality" firearms. (Viz., six-figure sporting rifles and shotguns.) So there goes that angle.

Trying to relate gun prices and purchases to ordinary commodities that we all commonly need and use regularly, and purchase with dollars, is a difficult stretch.

 

[KSDrifter]

It's not philosophical or even mysterious. Like in the least. It's called inflation. Except for when more people now want the same thing, then it's called people chasing scarce resources.

Take ammo for example. When we had the shortage, all of a sudden everyone started buying up all the ammo. There wasn't enough. That's people chasing scarce resources. Ultimately prices skyrocketed as people started to value the ammo more than before, and we got gouged. Then when ammo became plentiful again, the prices stayed the same because now we were being robbed. Ultimately raw materials and inflation will catch up to the real cost and knowing us, we'll get screwed by starting the cycle again lol.

 

[A10]

It's not philosophical or even mysterious. Like in the least. It's called inflation. Except for when more people now want the same thing, then it's called people chasing scarce resources.

Take ammo for example. When we had the shortage, all of a sudden everyone started buying up all the ammo. There wasn't enough. That's people chasing scarce resources. Ultimately prices skyrocketed as people started to value the ammo more than before, and we got gouged. Then when ammo became plentiful again, the prices stayed the same because now we were being robbed. Ultimately raw materials and inflation will catch up to the real cost and knowing us, we'll get screwed by starting the cycle again lol.

Ah, but the analogy held true from around the 1870's up through maybe the early 2000s. So it's not purely inflation. The cost of gold was on a steady increase, as was the cost of a new Colt. Maybe Colt screwed things up when they stopped manufacturing handguns for a while? Or just the gold market has gone entirely off the rails!

 

[45Smashemflat]

Or maybe Colt is accepting less margin per gun, and making their money on more volume? Sometimes you have to work your pricing with your competition in mind.

 

[KSDrifter]

Ah, but the analogy held true from around the 1870's up through maybe the early 2000s. So it's not purely inflation. The cost of gold was on a steady increase, as was the cost of a new Colt. Maybe Colt screwed things up when they stopped manufacturing handguns for a while? Or just the gold market has gone entirely off the rails!

Gold has absolutely gone off the rails!

 

[pharmer]

When I was young everything had great value and I could access none of it.
Mid way through life, some things had value and I could access the ones I wanted.
As an old man, no THINGS have value and I am happy to see others chase after those things.
Precious metals are precious to whom?
My worst investment ever.

Joe

 

[A10]

When I was young everything had great value and I could access none of it.
Mid way through life, some things had value and I could access the ones I wanted.
As an old man, no THINGS have value and I am happy to see others chase after those things.
Precious metals are precious to whom?
My worst investment ever.

Joe

I dunno...42 an ounce today.

 

[pharmer]

I dunno...42 an ounce today.

The $760 I paid for the silver would have bought 58 shares of Disney in 1981. With the splits that would be 2784 shares at $115 today or $320,000 vs $4,200. Yep, worst investment ever (Not counting $$$$ for stripper's kid's braces around the same time frame). Joe