Inflation and Housing: A Home’s Value Measured in Gold

Here's the thing about inflation.

The average person doesn't really understand it, because

if I buy the house like my

parents did, they paid $16,000 for the house

that I grew

up in in 1962. My mother's still living there.

The estimate for the house is $783,000.

So my parents think they made a lot of money, but when you inflation adjust it,

they didn't make money. And I tried to explain this to my mom.

She got really mad at me, but I'm gonna explain it to you.

If you bought my mother's house in ounces of gold in

1962, it would have cost you 450 ounces

of gold. Today, at that Zillow price, because of where gold is now,

gold's like 45, 4600 an ounce.

Yeah.

It's 250 ounces of gold. "So Mom, I know you see the

nominal number went from 16 to 783, but your value of

your house actually went down when you-

In gold terms

... that's when you adjust for inflation." I'm

making this point because it's easy

for the politician, 'cause the working class people don't

really jive

into and pulse on what's going on with the money.

They actually think they're inflation adjusted rich, if that makes any sense.