Will Your Bank Account Be ‘Cyprused’ Next?
By: Bill Bonner
Mar 27, 2013
U.S. stocks continued mostly going up last week. But European markets fell. Gold bounced up and down… but held above $1,600.
Most people would much rather own stocks than gold. Most of the time, they are probably right. Gold pays no dividends. Nor does it invent new things or open up new markets… or any of the other things that make stocks go up.
And now most people seem to think there is a “recovery” under way… and that the authorities have everything under control. So who needs gold?
According to Kim MacQuarrie’s book The Last Days of the Incas, a sailor in the 16th century earned about 8 ounces of gold for a year’s worth of service.
How much does a merchant seaman today earn? A quick Google search reveals a wage of about $2,500 per month… or about $30,000 per year.
That seems a little low. It probably doesn’t include health insurance and so forth. And maybe it includes all of those sailors from Indonesia and the Philippines who must earn less than the typical American mariner. So let us say $40,000, which is about the average wage in the U.S.
Hmmm… Eight times $1,600 (the current gold price) does not take us far. To about only $12,800. So either MacQuarrie is wrong. Or sailors make a lot more today than they used to. Or the price of gold is far too low.