Tuesday 11 November 2014

On reflection

Consumer prices are not a global constant, but a reflection of the current state within each economy.

When an economy flags, consumer demand is tepid and, conversely, boom brings high demand.

Given they are managed with the goal of price stability, currencies also measure economic state.

Objective comparison of economic state (via currency proxies) requires a universal unit of account.

In the real world: consumer goods demand changes; currency values adjust; gold remains constant.

You may say gold demand changes, and I'd agree. That is a reflection of demand for other things.

Protect me from what I want

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