Today, what's gold worth? The University of
Houston's College of Engineering presents this
series about the machines that make our
civilization run, and the people whose ingenuity
created them.
In his fine TV series
Civilisation, now thirty years old, Kenneth
Clark told of the pre-medieval nomads of Northern
Europe. Their culture lacked all the technologies
of permanence but one. They crafted jewels and
gold. Clark quotes one of their poets:
There once many a man
Mood-glad, gold bright, of gleams garnished,
Flushed with wine-pride, flashing war-gear,
Gazed on wrought gemstones, on gold, on silver,
On wealth held and hoarded, on light-filled
amber.
And we catch the glint of gold in the tangle of an
unsettled forest. Their craftsmen wrought bold,
dramatic items of gold encrusted with jewels.
Just the other day, Forbes magazine
displayed a graph that put those old Saxons in a
new light. It showed the price of gold in
present-day dollars. The graph starts in the 14th
century, when the stuff went for what would be two
thousand dollars an ounce today.
Immediately after, the
Plague killed off half of Europe's population,
and the value of gold fell to a little over one
thousand dollars. What gold there was now belonged
to half as many people, doubling the amount
available. Then, with a shortage of labor, new
technologies arose, and capital became important.
The price of gold began rising until Columbus
claimed the West Indies for Spain. It reached its
all-time high of 2500 dollars an ounce.
The Americas became a rich source of gold. As
Europe plundered the New World, the price dropped
until 1600, where it settled out at about 500
dollars an ounce. It stayed there until the
industrial revolution. Then something strange
happened.
Gold prices began oscillating wildly, seeking out
new lows. Each depression brought the value back
up. In the late 1970s, gold rocketed to a brief
high of 1400, 1999 dollars. But, by then, we'd
separated gold from money. That brief spike
represented short-term horse-trading. Gold had
reached its all-time low of 200 dollars an ounce
just before that. And at this writing it's worth
around 300 dollars an ounce.
For centuries, gold was the most precious substance
short of gemstones. Now many other materials are
worth more -- platinum for one. As gold prices
began to slump right after WW-II, poet Dylan Thomas
wrote the wonderful line "There was a Savior, rarer
than radium." The metaphor of gold was being
displaced.
Once we said, "He's worth his weight in gold." If
he weighed 180 pounds, he'd've been worth seven
million dollars when Columbus stumbled onto
America. He'd be worth a tenth of that today. My
1911 Encyclopaedia Britannica devoted nine
dense pages to gold. The current one brushes gold
off in part of one page. It's a strange thing to
wake one morning and find gold gone. But it is. Now
it's just one more commodity among so many others.
And a bit of magic has vanished back into those
ancient pagan forests of Northern Europe.
I'm John Lienhard, at the University of Houston,
where we're interested in the way inventive minds
work.
(Theme music)
