The above graph has two points to be considered:
1. There was a healthy correlation between the value of the US dollar and gold while the dollar was backed by gold prior to 1973.
2. The Y axis of the graph is logarithmic: each incremental change represents a tenfold increase in value: $10, $100, $1000 and then $10,000.
According to this graph, the real price of gold valued in US dollars should currently be $10,000 per ounce. Is gold undervalued or is the dollar overvalued? The obvious answers are yes and yes. The result of this policy will be hyperinflation courtesy of the Federal Reserve.