These three charts are pretty cool (courtesy of The Chart Store) — they show many hours you need to work in order to buy one unit of each of these — Oil, Gold and the4 CRB Commodities Index.

This introduces another element to commodity pricing — relative wage gains.


click for larger charts

Category: Commodities, Gold & Precious Metals, Wages & Income

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9 Responses to “Hours of Labor Required to Buy One Unit of Gold or Oil”

  1. royrogers says:

    this is quite interesting.
    So we will need more hours and the chinese will need less hours in
    the future until we meet in the middle somewhere on a global standard.

  2. drewburn says:

    Very interesting. I wonder what nat gas looks like?

  3. socaljoe says:

    I find it interesting that, since the last peak 30 years ago, incomes have risen more than the price of gold, but not more than the price of oil.

    To me this suggests the possibility of global crude oil depletion.

  4. mysterious eggs says:

    Not surprised by gold and oil, they are proxies for macro conditions and international politics. But the Reuters/CRB commodity index has a pretty strong downward trend. How much of that can be accounted for by subsidized commodity production and how much can be accounted for by technology increasing production?

    “It currently is made up of 19 commodities as quoted on the NYMEX, CBOT, LME, CME and COMEX exchanges. These are sorted into 4 groups, each with different weightings. These groups are:

    Petroleum based products (based on their importance to global trade, always make up 33% of the weightings)
    Liquid assets
    Highly liquid assets
    Diverse commodities.”

  5. Lancair360 says:

    Nathan Lewis had a piece out about a year ago that illustrated a similar point:

  6. andrea82ss says:

    I’ve read that during the 50s and, the dollar remained pegged to gold at its 1933 rate of $35/oz. These were wonderfully successful decades for the U.S
    If I think that today 1000$ is worth 0.8 oz while not long time ago 1000$ was worth 48 oz make me really think where we are supposed to end… We need to come back to a stable currency like it was in the 60′..

  7. Lancair360 says:


    I agree. Too often the debate descends into the merits of strong dollar versus a weak dollar to the exclusion of a stable dollar. If the dollar is stable eventually equilibrium will be achieved and the benefits of a stable dollar will be realized. What’s interesting to note in the charts that Lewis posted is how average hourly earnings continued to rise during a period when the dollar was defined in terms of gold and relatively stable at a specific price.

  8. sakhalinsk says:

    So few comments? What’s going on?

    To my mind, the second graph is one of the most important graphs in the world. Not just for now, but over the coming decades.

    Why? Because oil is the only real currency. Not because it is black and gooey, but because it does something. You can’t eat gold, as people keep reminding us. And you can’t trust paper, as recent history reminds us. But it is oil that keeps you out of the fields, oil that enables you to have “professional” rather than manual jobs. It keeps the lights on, the wheels turning, trade moving, governments in power.

    The fact that you need more hours work to access a barrel of oil, means you are paying more for access to that work, that energy. If it continues your standard of living must change. Look at all the elderly in the UK struggling to put their heating on. It’s turning eastern european.

    Interesting – but as to whether it will continue? I guess that depends on where you sit re: peak oil.

  9. postcarbon says:

    This is great stuff – along with the later post pricing the median home in ounces of Au.
    What is the nature of money, anyway?

    “Gold is money, everything else is credit” – JP Morgan

    Gold, while it cannot be eaten (it does not provide satiety when used in this manner), is money by social convention.

    I believe that, at the most fundamental level, MONEY IS THE RIGHT TO CONSUME ENERGY.

    I have not been able to come up with a better formulation – can you?