posted on Oct, 2 2007 @ 03:37 PM
You're mixing ideal conceptual issues that never exist and falsehoods. First off the price of anything is determined by what someone will pay for it
and someone will sell it for.
Gold goes up and down in value because someone bids an ounce per Gold at $x.xx value. Someone else sells it at $y.yy value and no one buys that so
the seller might lower his price to a buyers' bid...etc.
Then you have macro economic forces such as supply, inflation, costs of consumables etc.
Because the price doesn't increase by inflation alone you do not have the "it sells for 3x more but things cost 3x more". Inflation isn't always
so uniform, you can benefit from inflation by moving to a region where inflation is slower - working in an area where the cost of living is higher.
Imagine working in San Francisco but saving all your money then moving to the deep south, you'd be FAR richer than anyone in the deep south just
working a simple job in San Francisco.
Of course you'd have to live in a box to save all your money.
Inflation must be considered when dealing with growth of price of anything, stocks or gold etc.
That means if the price went up 10% but the inflation rate was 4% your value in that commodity only increased 6%.