How the Economist(s) manipulate gold's value in one chart

Gold Money's picture

Todays “Chart of the Day” from The Economist makes an attempt to show that gold isn’t doing any better when it comes to preserving buying power than currencies such as the Swiss Franc (CHF) or the Japanese Yen (JPY). Roy Sebag, co-founder of BitGold and CEO of GoldMoney, took the liberty to point out the obvious (and many) flaws in their chart (see his comments below):


“Here is an example of how the mainstream media either purposely or inadvertently manipulates data with respect to gold, preventing the masses who have little time to invest from assessing gold’s true performance.

In a piece published on February 24, 2016, The Economist created this graph entitled: ”Safe Havens”. In the graph they place three data points:


“Real” Gold Price

“Real Trade-Weighted” Swiss Franc

“Real Trade-Weighted” Japanese Yen


Error #1 – The Graph has gold starting at a different axis from the currencies. What in the world would warrant that? While the Japanese Yen and the Swiss Franc start at a value of 100, the gold price appears to start at a price of around 40. This disguises the outperformance of gold and manipulates the net performance to be closer in line with the currencies.


Error #2 – You do not inflation adjust gold. Gold is an indestructible element that can be purchased once, and held forever. Thus its value should not be inflation adjusted. A Tomato, or a barrel of oil should be inflation adjusted. I also argue that one shouldn’t inflation adjust any capital investment given that earning the inflation rate of return is impossible without taking risk.


Error #3 – If a decision was made to inflation adjust gold, why weren’t the currencies inflation adjusted? Note the sleight of hand using “Real trade-weighted exchange rate” – This is not equivalent to deflating a fiat currency by its local CPI equivalent


The author of this graph should have known better unless they have zero experience with econometrics and basic data science.”


Here is what the actual chart comparing CHF and JPY to gold would have looked like. While the CHF and the JPY preserved value better than the USD, both currencies are still down 87% and 90% vs gold, respectively.




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Latitude25's picture

Gold is great for the Kings, just not for you peasants.

Dame Ednas Possum's picture

Plenty of royalty on these pages then... methinks.

BendGuyhere's picture

Gold is such crap. And besides, it doesn't pay interest.'s picture

Standard Gold Debunkers fraud trick.. 1980 is always the base year to catch the sell off from all time highs.

Earlier dates such as creation of Fed, 1913 not such a hot choice, a hockey stick Gold vs 90%+ currency buying power destruction kinda spoils the case.

Lazane's picture

air tanks need filling

Dr. Spin's picture

I'm buying compressor futures.  All these "lake divers" are going to need air...


12357111317's picture

Excellent post.

I show that FXF (Swiss Franc etf) started at 02/26/2006.  From then till now, I show total returns of:

IAU (gold) +103.4%

GLD (gold) +101.8%

SPY (USA stocks) +88.2%

IEF (USA bonds) +84.2%

VNQ (realty) +80.3%

FXF (Swiss Franc) +24.7%

DXY (USA dollar index) +12.7%

FXS (Swedish Krona) -7.0%

FXE (Euro) -7.1%

CDN (Canada dollar) -18.0%

Strangely, I also show PLMAX (Pimco Emerging Markets Currency) +14.9%  (Wow.  Does this mean that emerging markets currencies held their value better than Dollars or Euros?)

FIAT CON's picture

I know my gold is worthless that is why I threw it in the lake.

cubicyard's picture

Foolish, do you not know the offical american government goldprice is $42.22. You just threw away something they will pay you for.

Midas's picture

I just realized all those explorers who were looking for El Dorado in South America were looking for the original "boating accident."  Maybe back then it was called a "rafting accident."

KingTut's picture

Where was that lake, exactly?

Dark Daze's picture
Dark Daze (not verified) Feb 24, 2016 10:38 PM

All you need to do is look at the source, Thompson-Reuters. The infamous Thompson family that got into bed with the Rothschilds in the early 20'th century and proceeded to viciously support apartheid in South Africa while selling blood diamonds on the diamonds exchanges. Reuters, owned, operated and directed by none other than the Rothchilds themselves. They seem to go a hell of a lot of trouble to try to tell everyone in the world that gold is worthless while sitting on the largest pile of it in history. What did the Thompson's get for their 'loyality'? Well, they got wiped out by the Rothschilds, because as you know, they always destroy the evidence.

This is why they are known as dirty ........

Ace Ventura's picture

Yeah, I saw Bank of International Settlements as the source and knew right then these charts were 'customized'. Did not know about the Reuters/Rothschilds connection though. Is there anything left on the planet those vampires AREN'T controlling?

Flying Wombat's picture

GATA's Bill Murphy on CNBC Asia


“In Gold We Trust” – CNBC Asia’s Bernie Lo - Dave Kranzler

JailBanksters's picture

The only ones that benefit from Inflation are Speculators and Banks, for everybody else it is an unnecessary evil that erodes your purchasing power away.

People are being duped into thinking money is money and a store of wealth. it is in fact the complete opposite and the Banks don't even thankyou for your stupidity.

Dre4dwolf's picture

Who cares what the chart says, when its all said and done if there is still a civilization all that will matter is the gold.

So buy some, no matter the price, up or down, the only way to win the race is to ride the train all the way around. 

logically possible's picture

So what you're saying is, we're not paying enough fiat for our gold. I kind of feel guilty.

joego1's picture

Economist = Liberal arts voodo scientist

Exalt's picture

It irritates me people have such a one dimensional view of economists. Do you even realise that economics has been split in two since around the Great Depression? What you see today is the fruit of Keynesian economics, not Classical economics. It's also pretty unfair to say they're not scientists, because there is good science in economics - best of all humanities in fact. There is also bad science too, but no one focuses on that in other disciplines now do they? No somehow bad science only happens in economics.

The OP (GoldMoney) made a clever quip on the use of the word Economist, but you guys just missed the point of it entirely.

“The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.” Although this is a quote from Keynes himself, I think it's particularly poignant to your post. You can hate economists all you like, they still rule your life and birthed more into the world than you can imagine.

I bet you lot have not even obtained Masters degrees in anything, yet you will judge what is science and what is not, yes?

BendGuyhere's picture

"...they still rule your life and birthed more into the world than you can imagine." OH PLEASE....

I don't have to imagine ANYTHING: World wars, depressions, hundreds of millions murdered. Historical FACT that is still unfolding its leperous bat wings.

"I bet you lot have not even obtained Masters degrees in anything, yet you will judge what is science and what is not, yes?" OH MY....

You're quite the little pseudo-academic SNOB aren't you? So damn proud of your MASTERS DEGREE...Cute.

I hereby award you a Masters degree in MASTERBATION.

Now crawl off to your cubicle and have a good cry.

Ace Ventura's picture

Damn dude.....someone woke up on the wrong side of the bed. Not sure why we're expected to hold anything other than a skeptical attitude towards modern economists, despite your pleas to the contrary.

-They still rule your life and birthed more into the world than you can imagine.-

Oh they certainly try hard enough to rule our lives, and so far it seems they've done a bang-up job through the always ready-to-help minions in gubbermint. As for birthing all sorts of goodness into the world.....sure, if you consider the current cornucopia of economic chaos resulting in the total pillaging of the non-0.01% as a laudable accomplishment.

And for good measure, you toss in the expected barb regarding people's education, or perceived lack thereof, in the absence of a 'Masters degree'. As if somehow a piece of paper that says 'Master of Economic Voodoo Arts' grants the bearer diving right to judge matters in terms of 'science'......whereas the poor non-degreed schlub who actually builds, repairs, designs, or otherwise produces things is too doltish and obtuse to be allowed an opinion on such matters of high import as the intricacies of 'animal spirits', or the finer points of 'structured investment vehicles' and 'derivative contracts'. Because everyone knows such higher concepts of finance are the TRUE engines of the world, and should best be left to those qualified members of the priesthood to manage and know, for the betterment of humanity and stuff.


RaceToTheBottom's picture

Economics needs a F=mA

Until it has that, it is not a science.  It is a social scinece.

Friedrich not Salma's picture

Quantum physics only has probabilities so perhaps there is some room for econ in science.

Dame Ednas Possum's picture

Ooooooo... look at the big brain on Exalt.

"Ooooooh! I'm just so irritated..."

"Oooooooh! It's just not fair..."

"Ooooooh! You're all uneducated peasants and unentitled to an opinion... except the one I bestow upon you"

Clearly we are not worthy of an audience it's this drama queen.

Looks to me like this 'legend in his own lunchbox' is butt-sore that he spent the last 10 years of his life incurring hideous debt on a distance-learning programme in exchange for a piece of paper stamped 'Economics Master of the Universe (quasi-scientist mumbo jumbo guesser).'

And now he can't even make night shift supervisor at some backwater truck-stop McDonalds.

Perhaps professor Exalt should be making policy at the Fed.

Squid-puppets a-go-go's picture

hey, that's disparaging to voodoo shamans

Fred Hayek's picture

it's not only a dismal science. They're dismal excuses for scientists.

Exalt's picture

Moron. So Hayek was a dismal excuse for a scientist? Think through what you are saying and stop dragging that good man's name into the dirt with your comments.

JohnGaltsChild's picture

Next time, I suggest they compare against the Weimar Mark or the Confederate dollar.

Dragon HAwk's picture

Good Catch....                  a totally honest mistake on their part i am sure      /S

Cognitive Dissonance's picture

The games people main stream fiat lovers play.

philipat's picture

The Rothschilds want to keep all the Gold for themselves?

RaceToTheBottom's picture

Implicit to Bankstering is the war against Gold.

Gold is the anti Fiat

Dark Daze's picture
Dark Daze (not verified) philipat Feb 24, 2016 10:40 PM

Well, actually they intend to rule the world, and they are so close now......evil never dies it just changes form.