In 1982: When gold was truly more valuable than it is now

In an era where “high prices” are becoming the norm, a simple yet profound question arises: are current prices truly higher than before? When considering gold at $5,600 per ounce, this figure seems to hit a historic peak. However, when comparing it to the money supply in the economy, a surprising truth emerges: the highest real gold price was not today, but in 1982.

Why was gold in 1982 more valuable than today by 16%?

Fourteen years ago, an ounce of gold had about 16% more purchasing power than it does now. This may seem contradictory to headlines about record gold prices, but the answer lies in the difference between “nominal price” and “real price.”

In 1982, the money supply was still limited, and gold was considered a superb asset. An ounce of gold back then could buy a small house. Today, that same ounce can only buy a small fraction of a typical house (valued around $500,000). The difference isn’t that gold has become cheaper; it’s that money has been printed more rapidly than any asset has appreciated.

When money loses value faster than assets appreciate

This is the true nature of inflation. It’s not that gold, real estate, or other assets naturally become more expensive. In reality, money loses value, gradually but continuously.

Look at the big picture: has your salary increased fivefold over 40 years? Meanwhile, housing prices have gone up 10, 20, or even 30 times. A house worth 20 billion VND is no longer shocking; a car costing 5 billion VND becomes normal. Gold at $10,000 per ounce may not be surprising in the future. But wages never keep pace with these rising prices.

The feeling that “everything is getting more expensive” isn’t because assets are becoming inherently more valuable, but because the unit of measurement (money) is losing value. It’s like changing the measuring stick—using a shorter ruler makes everything seem larger.

The rich and the lagging in the era of money printing

This imbalance creates three groups of people with vastly different fates:

Group 1 – Asset-sensitive owners: Those holding real estate, stocks, or assets that appreciate at the right time. In Vietnam since the 1990s, this has primarily been real estate. Those who seized the opportunity accumulated wealth rapidly.

Group 2 – Value preservers: Those owning gold, foreign currencies, or other “safe” assets. They don’t lose anything, but they don’t get richer either. Their assets only preserve value amid currency devaluation, while their relative position in the economy weakens.

Group 3 – Cash holders: Those mainly storing value in cash or savings accounts. During periods of rampant money printing, this group suffers the most. Salaries don’t increase, money loses value, and purchasing power declines.

In a society that is constantly developing but where currency continually depreciates, doing nothing = losing.

From gold to a different choice

Buying gold makes sense: it helps preserve wealth in the face of currency devaluation. However, it doesn’t help you escape the monetary system. An ounce of gold in 1982 has the same purchasing power as five ounces today—you’re not truly richer within the dollar system.

Even more dangerous: as money continues to be issued, your relative position weakens. You may preserve absolute value, but you fall behind those who own appreciating assets.

To not only preserve but also enhance your position within an expanding monetary system, you need to seek assets with strong growth potential. Real estate has played this role in Vietnam over the past decades. Currently, digital assets like Bitcoin (BTC), with a price around $67,110, and a limited supply mechanism with increasing demand, are showing similar characteristics—not just preserving value but also increasing your relative standing in a global expanding monetary system.

The lesson from 1982 isn’t that gold is outdated; it’s that gold only preserves. To truly advance in this era, you need to find assets with superior growth potential.