The extreme fluctuations in wages shown above reflect the extreme fluctuation in the market price of silver. We aren’t on a metallic standard anymore and so precious metals like gold and silver has no use as money any more. There historical use as money means that their historical prices were far greater than their values as a commodity. Because of this history, both metals are objects of speculation, particularly gold. If we take the price of gold in 1914 (the last year of the classic gold standard) and put it in terms of today’s money, it would be about $500. Thus, had the gold standard been maintained, an ounce of gold ($20.70 1914 dollars) would buy a bundle of goods that would take about $500 to buy. But gold currently sells for way more than $500. The difference is the speculative premium resulting from gold enthusiasts willingness to pay more for gold. Since 1971, gold has sold at a premium except for a brief period at the end of the 1990's.
What this means is one cannot use the market price for gold and silver since the time they were money to try to estimate their value were they still being used as monetary standards. When used as a monetary standard there is no "specie market". No chance for speculation, it would be like buying and selling dollars (they are always going to be worth a dollar). The best estimate of what prices would look like under a gold standard would be real prices and wages. These have fallen since the 1960's for fundamental reasons having nothing to do with monetary effects. Had we been on a gold standard, the minimum wage would likely have remained at the $0.25 initially established by FDR, which would be about $4.20 today.
You should read about the Greenback party, the populists and the free silver movement. All of these were little guys, who actually lived under a gold standard. They wished for fiat money or at least silver (the more inflationary monetary standard). If inflation is really so good for the little guy why did they press for the opposite? Might it not be that they knew more about the gold standard than you?
What this means is one cannot use the market price for gold and silver since the time they were money to try to estimate their value were they still being used as monetary standards. When used as a monetary standard there is no "specie market". No chance for speculation, it would be like buying and selling dollars (they are always going to be worth a dollar). The best estimate of what prices would look like under a gold standard would be real prices and wages. These have fallen since the 1960's for fundamental reasons having nothing to do with monetary effects. Had we been on a gold standard, the minimum wage would likely have remained at the $0.25 initially established by FDR, which would be about $4.20 today.
You should read about the Greenback party, the populists and the free silver movement. All of these were little guys, who actually lived under a gold standard. They wished for fiat money or at least silver (the more inflationary monetary standard). If inflation is really so good for the little guy why did they press for the opposite? Might it not be that they knew more about the gold standard than you?