Stock-to-Flow vs. Reality: What Gold Teaches Us About Scarcity and Price

Show Notes

In this episode, Matthew kicks off a multi-part critique of the Stock-to-Flow (S2F) model by examining how it applies to gold—and where it falls short. He walks through more than two centuries of gold production data, revealing that gold’s compound annual growth rate (CAGR) of 1.7–1.8% implies a doubling time of around 42 years, yet the commonly cited S2F metric gives 60 years—already a major inconsistency. Matthew contrasts this with gold’s actual price growth, which he shows has compounded at only 5.1–7.3% annually since it was de-pegged from the dollar in 1971. When applied to price, the S2F drops dramatically to 14–20, far below the oft-cited “60.” He also highlights major flaws in how silver and other assets are modeled using S2F, especially inconsistencies in data treatment. This video lays the groundwork for examining Bitcoin’s valuation models in the next episode. Porkopolis Economics - Episode 186 Chapters: 00:00:16 - Bitcoin's Scarcity vs. Gold Supply 00:03:23 - Understanding Exponential Growth Rates 00:05:18 - Understanding Gold's Stock to Flow 00:06:54 - Gold Supply Growth and Valuation 00:09:12 - Analyzing Gold's Exponential Growth 00:11:43 - Gold Price Trends Over 55 Years 00:15:07 - Analyzing Gold Price Growth 00:16:55 - Analyzing Gold's Price Trends 00:17:59 - Understanding Stock to Flow and Valuation 00:21:58 - Future Projections of Gold Prices 00:26:23 - Analyzing Gold and Silver Returns 00:30:33 - Comparing Stock to Flow of Metals 00:32:50 - Discrepancies in Diamond and Bitcoin Markets 00:34:45 - Analyzing Gold's Stock to Flow Dynamics Show Sponsors: Trezor - https://trezor.io/ Debifi - https://debifi.com/ Donations to Porkopolis Economics via BTCPay are appreciated: https://donations.porkopolis.io/ Porkopolis Economics covers macroeconomics, money, geopolitics and sports from the creator of the Crypto Voices podcast, Matthew Mezinskis. Data-driven. Scale matters. Smaller, decentralized states means more opportunity for liberty than larger ones. Host: Matthew Mezinskis https://porkopolis.io https://x.com/1basemoney Show content is not investment or financial advice in any way.