New Car in Gold
Ounces of gold to buy a new vehicle (avg transaction price, BEA/KBB) · Quotes delayed up to 5 minutesThe median new car price expressed in ounces of gold, plotted from the 1960s to today. Cars have undergone dramatic real productivity changes — modern cars are vastly more capable, safer, more efficient, and more comfortable than 1960s vehicles — so the chart contains both a real-cost component and a currency-debasement component, with the real-cost story flowing in the direction of cheaper-per-unit-of-capability over time.
Analyst's Note
The chart shows that new cars cost roughly 100 ounces of gold in 1970 and have declined substantially since then. The decline reflects both productivity gains in auto manufacturing and currency debasement, with the productivity component arguably dominating. This is different from the home chart, where productivity gains in housing are far smaller and the price decline in gold terms is overwhelmingly a currency story. For the analytical investor, the contrast between the home chart and the car chart is instructive: when gold-denominated prices fall sharply for goods with significant productivity gains, the productivity story is intact; when they fall sharply for goods with limited productivity gains (housing), the currency story is intact. Both can be true simultaneously.
The median new car price expressed in ounces of gold, plotted from the 1960s to today. Cars have undergone dramatic real productivity changes — modern cars are vastly more capable, safer, more efficient, and more comfortable than 1960s vehicles — so the chart contains both a real-cost component and a currency-debasement component, with the real-cost story flowing in the direction of cheaper-per-unit-of-capability over time.
Analyst's Note
The chart shows that new cars cost roughly 100 ounces of gold in 1970 and have declined substantially since then. The decline reflects both productivity gains in auto manufacturing and currency debasement, with the productivity component arguably dominating. This is different from the home chart, where productivity gains in housing are far smaller and the price decline in gold terms is overwhelmingly a currency story. For the analytical investor, the contrast between the home chart and the car chart is instructive: when gold-denominated prices fall sharply for goods with significant productivity gains, the productivity story is intact; when they fall sharply for goods with limited productivity gains (housing), the currency story is intact. Both can be true simultaneously.
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