How much is a German Mark (DEM) worth in Euros?

This is something intended for the Europeans in general and citizens of the former Yugoslavia in particular, since we used to do our inflation-hedging by doing everything in DEM. So, we must still remember how much is a DEM worth.

1 EUR is 2 DEM, right? That’s the conversion rate that was used when the Euro was introduced. And I caught myself thinking about that, implicitly assuming this conversion rate when I was thinking about the housing prices in the past, when a square meter in Zagreb used to cost somewhere around 1000 DEM, with the highest prices reaching 2500 DEM and the lowest being around 500 DEM. I was thinking how the prices went to Jupiter since then, as they are now between 1000 and 3000 EUR per square meter. That would be 2000-6000 DEM. Or would it?

And then I thought of a good way of verifying my calculations: the historic gold price chart in EUR:

The red X marks the spot where EUR replaced the former currencies in circulation; its value is 10000 EUR per kilo of gold. This means the value of DEM is 20000 per kilo of gold.

Today the price of EUR is above 40000 per kilo of gold. This means its actual value dropped by the factor of four since introduction, and the value of DEM, in today’s Euros, would be 2 EUR. So the exchange rate would still be 1:2, only the other way around.

So, the cost of housing in Zagreb today, recalculated using gold as the standard, would be 500 DEM for the cheapest, 700 for the normal, and 1500+ for the high-end of the range. Basically, that means that the prices got more affordable, in terms of gold per m2.

As a conclusion, no, the real estate is not going through the roof, and no, gold is not going through the roof. It’s the paper currency that’s gone down, by a factor of 4 in the time span of 17 years. You will ask why nobody told us? I will ask, why do you think they would want you to know? Your faith in their bullshit currency is what gives it value. Your faith is a commodity. You and I are just cattle that’s bred for slaughter. You don’t tell the cows the prices of meat and milk on the market. So, if you were a good boy and saved your euros somewhere in a bank, you are now rewarded by being poorer by a factor of 4. If you had your savings in real-estate or gold, you’re fine.