Hard to get excited about a 8 year gold basis for inflation when gold went from a little less than $600 in January 1980 to under $300 in December 1999 (at it's peak in '80 it was $800). A twenty year span where we had deflation? Hardly. Were gasoline, rent, food, utilities half of 1980's prices in 1999? Not to my recollection.

Of course, if the adding 3% means anything and is based on anything other than an attempt to make the theory work, it means that gold prices will consistently stay 3% below the true inflation rate. 

Sounds like faith based economics to me.