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Gold price III, the real price of Gold?

Darth (et al).
It struck me in our recent debate about the Gold price that we may have both lost sight of one factor. You quite rightly pointed out that the dollar has slipped so the current record highs need to be offset however what about the US policy of fixing the gold price in the 1930′s? Also if we consider the low price in 1900 against the buying power of the dollar in 1900 (what was a dollar worth, equivalent in today’s terms) is there a way to calculate the “real” value of gold? Using these calculations has gold increased dramatically since 1900 or is it stable?
The current price of around $918 would have been considered a fortune in 1900….
Can Darth or anyone with a good calculator help…?

Presented here are six indicators for making such comparisons in US dollars between any two years from 1790 to 2005. They are the CPI, the GDP Deflator, the Consumer Bundle, the unskilled wage rate, the GDP per capita, and the GDP.
Descriptions of the indicators
The CPI is most often used to make comparisons partly because it is the series with which people are most familiar. This series tries to compare the cost of things the average household buys such as food, housing, transportation, medical services, etc. For earlier years, it is the most useful series for comparing the cost of consumer goods and services. It can be interpreted as how much money you would need today to buy an item in the year in question if its price had changed the same percentage as the average price change.

The GDP Deflator is similar to the CPI in that it is a measure of average prices. The “bundle” of goods and services here includes all things produced in the economy, not just consumer goods and services that are reflected in the CPI.

The Consumer Bundle is the average dollar value of the annual expenditures of a “consumer unit”. The consumer unit could be a family or another type of household. The main point is that spending is a joint decision of the members of the unit. The bundle increases over time as household income increases. Unlike the CPI, not only the cost but also the amount of goods and services increases over time.

The Unskilled Wage Rate is good way to determine the relative cost of something in terms of the amount of work it would take to produce, or the relative time it would take to earn its cost. It can also be useful in comparing different wages over time. The unskilled wage is a more consistent measure than the average wage for making comparisons over time.

The GDP per capita is an index of the economy’s average output per person and is closely correlated with the average income. It can be useful in comparing different incomes over time.

The GDP is the market value of all goods and services produced in a year. Comparing an expenditure using this measure, tells you how much money in the comparable year would be the same percent of all output.

In 1900 the price of gold was $20,67 on the stock markets.

http://www.measuringworth.com/gold/

If we use the CPI or GDP Deflator methods, then we get the amounts of CPI =$511,93 and GDP =438,71 in 2007
The following website gives you a calculator to work it out.

http://www.measuringworth.com/uscompare/

Thus, gold is worth more today at $900 than at $20,67 in 1900.

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