There’s no such thing as adjusting the gold price for inflation. It’s a complete misunderstanding of what gold represents. Gold – much like a foot or an inch – is a constant. You don’t measure the foot or the inch against other units; you measure everything else against them. The same goes for gold. It’s the yardstick, not the variable.
Take North Korea’s Kim Jong Un, for example. He’s 5’7″ tall. Imagine he suddenly declared that a foot is now just six inches, making him an apparent 11’2″. Sounds ridiculous, right? Because it is. Changing the definition of a foot doesn’t change the reality of his height. 5’7″ remains 5’7″, regardless of how you try to rebrand the measure. A foot is always 12 inches. It doesn’t flex for convenience.
This brings us to the flawed thinking of so-called inflation hawks. They’re obsessed with adjusting modern prices for inflation – looking back a year, a decade, even a century – as if that tells us something useful. But this exercise is not only imprecise, it’s often meaningless. That’s because inflation, as it’s commonly presented today, is largely fiction – a bureaucratic construct built on arbitrary baskets of goods. Worse, it’s been twisted into economic gibberish: blamed on growth, government spending, debt, or price rises – sometimes all at once.
But true inflation, in real terms, is simply the devaluation of the measuring stick – a policy decision. It’s like redefining the foot as six inches so five feet becomes ten. If you “adjust” for that, someone who is 10 feet tall is now said to be five. You’re not revealing reality – you’re hiding it behind smoke and mirrors.
That’s the stupidity of inflation. When seen for what it is – a deliberate shrinking of the unit of measure – it’s nothing more than a clumsy attempt to mask economic problems. There’s nothing “stealthy” about it, despite what Keynes once claimed. If the foot suddenly halved in length, nobody would be fooled. Likewise, if your money buys less, you know it – and you feel it.
And yet, people like Stephen Miran, one of Trump’s economic advisers, still argue that a weaker currency – that is, inflation – makes American businesses more competitive. It’s astonishing that such a fantasy is entertained, let alone by someone who advises a head of state. Shrinking the value of the dollar doesn’t magically reduce the cost of production – because those same dollars are used to pay for labour, materials, and every other input.
It’s no different than thinking a shorter measuring tape makes your house bigger. It doesn’t. Just as redefining the foot won’t help you get into the NBA, a weaker dollar won’t give your exports a competitive edge. The maths don’t lie.
Which leads us back to gold. Some argue that at around $3,200 an ounce, gold’s not “really” $3,200 – that we need to adjust for inflation. But no, we don’t. And we can’t.
Gold is the measure. Not perfectly fixed, but close enough that it has served for millennia as the most reliable reference point for value. Gold wasn’t chosen as money because it’s pretty – it was chosen because it behaves like a constant, just like the foot, the inch, or the tablespoon. If it didn’t have those qualities, it never would have earned its status as global money in the first place.
So when people suggest adjusting the gold price for inflation, they’re missing the point entirely. It’s like adjusting the foot. It’s nonsense – and nobody who understands the mechanics of money is fooled.
At the heart of it, inflation is nothing but sanctioned theft. It steals the value of people’s savings, their wages, their trust. No one gains from it, except those doing the stealing. Which makes Miran not just wrong – but dangerously wrong.
