Years ago, a suit model was proposed, by Franz Pick, I am told. An ounce of gold worth $20 bought a custom made man’s suit in 1914. What about today? It’s easy to check internet prices. I have found such prices as $550, $750, 3 for $2200, 2 for $1,700, 2 for $1900, as well as high-end prices of $1,595. An ounce of gold costing $860 can still buy a decent custom-made man’s suit. This and similar items like t-bone steak give us some confidence that gold’s price today is fairly-valued. If we assume that gold is a proper numeraire … Continue reading Carpenters, suits, and gold