The US dollar became free to float from the price of gold 40 years ago yesterday.
Gold was $35/oz. and bought 15 barrels of oil at $2.30/bbl. In May 1981, an ounce of gold ($480) still bought 15 barrels of oil ($32).
Now, gold ($1787) buys 20 barrels of oil. Which one of them is underpriced? (graph - courtesy http://www.bbc.co.uk/)
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