For a Sunbelt native like myself, spending the first week in August amidst Fir-Trees-on-the-Bay was about as exotic an escape imaginable. I lived without telephone, Internet, TV, or even a newspaper (until today). It can be truly said that my vacation bliss was achieved in a state of total ignorance about the world outside.

Yet…

On my return flight to Phoenix, today’s “Globe and Mail” informs me that gold gained about US$20 during the week. And perhaps not coincidentally that Israel and Hezbollah are still duking it out, and that the phrase ‘civil war’ is now current in Iraq, and this week four Canadian troops lost their lives in Afghanistan (remember Afghanistan?)as that country continues to slide into chaos. Were I an alarmist, I would bring up the possibility that these conflicts could grow and merge into one WWIII-scale conflagration.

But I'd rather talk about this vacation I just returned from. The outer Gulf Islands are a lovely area, actually. The kind of place you visit, and after a couple of days, you’re hooked. I even bought a book at the local general store, a collection ("More Tales from the Outer Gulf Islands") of short histories from the olden days on these isolated islands, which even today are only reachable via ferry.

My own obsession with the ongoing degradation of what we call money colored my reading, as stories from the book reminded me of what a dollar used to be back when a dollar was a dollar. One story told of a family renting a 40-acre island in the early part of the 20th century for $1 (Canadian) PER YEAR on a 5-year lease. The renter raised sheep and a few chickens, had a garden, and hunted and fished for most of his family’s protein needs. On another island, a 100+ acre farming parcel bordering the sea was sold in 1909 for $500. That wasn’t some screaming bargain, but simply the market at the time between knowledgeable buyer and seller.

Moving forward in time, we paid in weekly rent for our little cabin by the sea more than $1,000. The car we rented for a week cost us more than $500. Single acre waterfront lots on these islands today sell for over $200,000 each if middling situated, and for much more if on a good sheltering cove. Should a 100+ acre parcel bordering the sea come on the market, it would take Trump-size money to buy it today.

To return to a theme you have read here before, a dollar just isn’t a dollar anymore. And not just by a little, but by several orders of magnitude, no matter how you measure it. In fact, today's pipsqueak impostor of a ‘dollar’, compared to your grandfather’s $20.67 per ounce of gold dollar, or even FDR’s $35 per ounce dollar, doesn’t even deserve the name.

Of course, you could take my examples and assert that the real estate market, worldwide, has simply gotten ahead of itself. And sure enough, many of our newest and largest gold customers over the past couple of years have come to exactly that conclusion, and converted some of their assets from dirt to gold (Sounds like a good trade when put that way, doesn’t it?)

Whatever currency you measure in, gold, although it has more than doubled in price since 2001, still looks like an underperformer compared to the dollar inflation we have seen in other assets - real estate being the most striking.