I think we need a measurement system in order to measure absolute wealth, the correct way. It's pretty hard to keep track of our wealth and value of our assets, in a relative world, especially when inflation exists.

Even if inflation would not exist, this would still be problem, but with inflation, it adds another degree of difficulty to it. As we know value is relative, but it is possible to extract an absolute value, which will be the aggregate of the combined relative values.

My philosophy is relativistic, but that doesn't mean that absolute can't exists in the form of an aggregate relative, and this applies to economics as well. Markets are relative, but if you add them all up, you can at least estimate an absolute value.

Basic Thought-process

• We know that to measure wealth, or value, the price mechanism is the optimal tool for it, since nothing is a better measurement tool, than the price mechanism
• We know that the price mechanism is subjective, but the aggregate relative subjective valuations, give an objective absolute price as a result
• We know that the price itself is also relative link to something else, like a currency ( BTC/USD, XAU/USD ,etc)
• Therefore we know the asset value from the price, but we need to figure out the quote currency's absolute value
• Therefore we need a global aggregate value, that this research will hopefully yield

Candidates:

• Gold & Silver

For obvious reasons, using Gold or Silver as a benchmark is not right, it barely makes up a fraction of global trade, so it is not a good benchmark for measuring wealth. It is also a manipulated market, but even if it wouldn't be, it still doesn't measure all the wealth in the world. We need a system that counts everything together.

Even in ancient times when Gold and Silver was widely used, it was still not a good measurement unit, since there were other assets widely used as well. It's impossible to measure your wealth in 1 asset, when the other assets might not have a link with it.

Despite my assumption, I will still research this option to see how would a Gold or Silver benchmark work out.

• US Dollar

USD is the reserve currency of the world so it would make sense to use this as a measurement unit, however it still leaves out a huge chunk of the market. If house prices rise by 7000% in Poland, it will probably not impact the USD, however it will the EUR, so despite the USD's wide use, alone it has no good accuracy.

• Dollar Index

The USDX is a good candidate, but I feel that it's still missing out some key points, like inflation, which is reflected in the exchange rate, but if all currencies are inflationary, then it would be like measuring distance inside in a moving train, it's impossible without a point of reference.

• Trade Weighted Dollar Index

• https://fred.stlouisfed.org/series/TWEXB
  The FED has this index that it calculates, based on the trade between US and other countries in the index. Now trade weighting is probably more accurate than the simple Dollar Index, but still not the best since commercial trade does not contain all USD transactions. Meanwhile it doesn't account for inflation.

• https://fred.stlouisfed.org/series/TWEXBPA
  So they have the same Trade Weighted Dollar Index, but adjusted for inflation. One step better, however they probably use CPI inflation, which I don't agree with. I would just use the M1 supply change. Still this is by far the best benchmark for now, but I will probably have to research a better one.

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Conclusion

I will work on this research on my spare time. It's really important for people to have a unit of measurement for absolute wealth, otherwise you have no way of knowing how much money you have because, we are all in a shifting sand of financial uncertainty, and fiat currency value is very misleading.

Then I will extend this into cryptocurrencies, so that we can compare how much wealth do cryptocurrencies bring to holders.