Why was the gold price in 1982 actually higher than it is now: The secret behind currency devaluation

Have you ever wondered why, despite gold today reaching 5,600 USD/oz, it doesn’t buy as much as it used to? The answer lies in a bitter truth: if measured by real purchasing power, the price of gold in 1982 was about 16% higher than it is today. This is not a coincidental figure but a direct consequence of an endlessly expansive monetary policy.

The Real Measurement: Purchasing Power vs Nominal Price

When it comes to prices, we are often dazzled by the number on the quote board. But those figures are not the whole story. In 1982, an ounce of gold could buy a small house. At that time, the money supply in society was limited, so gold was “expensive” not only by nominal price but also by real purchasing power.

Today, 1 ounce of gold = 5,200 USD. But a similar house back then is now priced at around 500,000 USD. This means: although the nominal price of gold has increased many times over, one ounce of gold can NO longer buy a house like it used to. Real purchasing power has diminished, not increased.

From 1982 to Present: Money Printed Faster Than Asset Prices Rise

The story behind these numbers is the depreciation of currency. Every time the government and central banks continue to print more money, the value of each unit of that money decreases. Gold is not appreciating - it is simply “resisting” the depreciation of currency.

If we compare the price of gold with the money supply, what economists call “M1” or “M2”, we will see a completely different picture. The price of gold rises sharply when viewed in USD, but USD is printed even faster than gold increases. The result: the price of gold in 1982, according to the money supply, had superior purchasing power.

Different Impacts on Various Groups of People

In this ever-evolving social environment, those who own “responsive” assets - like real estate or high-growth companies - will become very wealthy quickly. They have the potential to appreciate faster than the rate of money printing.

But those who only hold gold - a value-preserving asset that does not grow - will remain stagnant. Worse still, those who hold cash will continuously fall behind, as cash is the most vulnerable asset to currency depreciation.

Why “Everything Is Getting More Expensive” Is Not Natural

The feeling that “everything is getting more expensive” is not because assets are inherently becoming more valuable. It is because currency is depreciating. Gold at 10,000 USD/oz, houses at 20 billion VND, cars at 5 billion VND… such high numbers will become normal. But the dangerous truth is: our wages do not keep pace with the rate of money printing.

You will not feel wealthier, even though the numbers on paper are larger. On the contrary, your real purchasing power will weaken. Buying gold only helps preserve the value of your assets, but does not help you escape the dominance of the fiat monetary system.

Bitcoin: A More Sustainable Growth Asset Than Gold?

To truly break free, you need to find an asset that not only preserves value but also has growth potential. Bitcoin is seen by many as a potential candidate - it combines both long-term value protection and the potential for superior growth in an expanding monetary system.

Currently, BTC is trading around 66.68K USD. Unlike gold, Bitcoin has a developing community, expanding applications, and high adaptability. However, the approach to any asset requires careful consideration of risks and your own strategy.

Conclusion: Finding the Right Asset for the Era

History shows that when currency is continuously printed, those who remain inactive will fall behind. The price of gold in 1982, according to real purchasing power, is still higher than today, because the amount of money released is increasing faster than gold’s price rise. The lesson here is not that gold is bad, but rather: in a world of expanding currency, you need assets that have the potential for sustainable growth, not just assets to preserve value.