Gold-Adjusted SPY Index

This visualization shows the S&P 500 index priced in gold ounces rather than US dollars. By measuring stocks against gold instead of currency, we can better distinguish between genuine value creation and the illusion of growth caused by currency devaluation.

When trust in money breaks, assets priced in that money often rise not because they gained value, but because the money lost it.

This pattern is evident following major monetary policy changes like 1933 (when FDR abandoned the domestic gold standard) and 1971 (when Nixon ended dollar convertibility to gold). Both periods saw stock markets rise in dollar terms while declining when measured in gold.

In 1933, FDR's decision to confiscate gold and devalue the dollar by 40% created an apparent stock market recovery. While the Dow Jones rose in dollar terms after this devaluation, it actually fell by over 20% when measured in gold ounces. Similarly, following Nixon's 1971 "temporary" suspension of dollar-gold convertibility, the stock market's nominal gains in the 1970s were completely erased when priced in gold. What looked like growth was actually currency debasement.

The main chart displays two metrics:

• SPY in USD (blue line): The dollar value of SPY shown on the left axis.
• Gold Price in USD (pink line): The dollar price of an ounce of gold shown on the left axis.
• SPY in Gold (gold line): How many ounces of gold it takes to buy one unit of the S&P 500 index, shown on the right axis.

When SPY in Gold rises, stocks are genuinely outperforming gold. When it falls, the apparent growth in dollar terms may be masking a decline in real purchasing power.

Historical Gold Standard Events

• 1933
  FDR abandons gold standard: Executive Order 6102 prohibits private gold ownership for US citizens, effectively ending the gold standard domestically.
• 1971
  Nixon ends convertibility: Nixon suspends gold convertibility ("Nixon Shock"), effectively ending Bretton Woods.