# How can you measure whether the total accounted for gold increases faster than gold is mined? **URL:** \ **Category:** Great Debates\ **Created:** [December 18, 2019, 8:08pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043 "2019-12-18T20:08:48Z")\ **Posts on this page:** 15\ **Page:** 3
**Author:** ![alterego](https://avatars.discourse-cdn.com/v4/letter/a/6bbea6/32.png) [@alterego](https://boards.straightdope.com/u/alterego)\ **Post date:** [December 20, 2019, 5:53pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/41 "2019-12-20T17:53:57Z")
> [@septimus](#): > > Dopers disagree whether the U.S. abandoned the gold standard in 1933 or in 1971, but either date is prior to 2019. Actually, the only way to really prove that there is no gold standard would be to drop a nuke on Ft Knox and observe that the market for the dollar doesn’t care. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 20, 2019, 11:29pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/42 "2019-12-20T23:29:20Z")
> [@alterego](#): > > Actually, the only way to really prove that there is no gold standard would be to drop a nuke on Ft Knox and observe that the market for the dollar doesn’t care. Wouldn’t it be a whole lot easier to try to exchange a dollar for gold and be told we stopped doing that many decades ago? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 21, 2019, 11:07am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/43 "2019-12-21T11:07:00Z")
> [@alterego](#): > > Actually, the only way to really prove that there is no gold standard would be to drop a nuke on Ft Knox and observe that the market for the dollar doesn’t care. Nitpick: I think financial markets might be affected by a nuke detonated in any populated part of the U.S., whether a gold depository is affected or not. > [@Exapno\_Mapcase](#): > > Wouldn’t it be a whole lot easier to try to exchange a dollar for gold and be told we stopped doing that many decades ago? The Central Banks of Switzerland and France alone exchanged about $250 million of dollars for gold at $35/ounce just in the summer of 1971, no? ---
**Author:** ![Slow\_Moving\_Vehicle](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slow_moving_vehicle/32/291_2.png) [@Slow\_Moving\_Vehicle](https://boards.straightdope.com/u/Slow_Moving_Vehicle)\ **Post date:** [December 21, 2019, 2:33pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/44 "2019-12-21T14:33:19Z")
> [@septimus](#): > > Nitpick: I think financial markets might be affected by a nuke detonated in any populated part of the U.S., whether a gold depository is affected or not. > > The Central Banks of Switzerland and France alone exchanged about $250 million of dollars for gold at $35/ounce just in the summer of 1971, no? Tangential but interesting fact: since so many European countries store their gold reserves in the vaults of the Federal Reserve in New York, such transactions are accomplished by a guy with a hand truck loading up some gold bars in one cellar, trundling them over to another, and striking them with the seal of the new owner’s central bank. This according to Peter Bernstein’s _The Power of Gold: History of an Obsession_. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 21, 2019, 5:12pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/45 "2019-12-21T17:12:41Z")
> [@septimus](#): > > The Central Banks of Switzerland and France alone exchanged about $250 million of dollars for gold at $35/ounce just in the summer of 1971, no? Hey, Rip van Winkle. I hate to tell you, but 1971 was 48 years ago, which I’d call many decades ago. In fact, I did. ---
**Author:** ![alterego](https://avatars.discourse-cdn.com/v4/letter/a/6bbea6/32.png) [@alterego](https://boards.straightdope.com/u/alterego)\ **Post date:** [December 21, 2019, 5:24pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/46 "2019-12-21T17:24:16Z")
> [@Exapno\_Mapcase](#): > > Wouldn’t it be a whole lot easier to try to exchange a dollar for gold and be told we stopped doing that many decades ago? I Am Not An Economist Value comes from work you’ve done (static) and work you can do (dynamic). If we are in a bubble, then the backing for our economy is work we’ve done (ie hoarded gold) and the work we can do on an ongoing basis. You might actually say that inflation, as measured as the amount of money over and above its backing by natural resources, is strictly due to dynamic concerns. Which means that in a depression, if you have no static resources, you are increasingly broke as a function of how bad the depression is. TL;DR If the US were to irradiate its gold, and this were made public, it could crash our economy overnight. ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [December 23, 2019, 10:29pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/47 "2019-12-23T22:29:29Z")
> [@alterego](#): > > I Am Not An Economist Obviously. > [@](#): > > Value comes from work you’ve done (static) and work you can do (dynamic). If we are in a bubble, then the backing for our economy is work we’ve done (ie hoarded gold) and the work we can do on an ongoing basis. You might actually say that inflation, as measured as the amount of money over and above its backing by natural resources, is strictly due to dynamic concerns. Which means that in a depression, if you have no static resources, you are increasingly broke as a function of how bad the depression is. > > TL;DR If the US were to irradiate its gold, and this were made public, it could crash our economy overnight. Essentially none of this is right, especially the Goldfinger bit at the end. Value is down to perception; see the diamond-water paradox, where water is almost infinitely more useful than diamonds, but diamonds are hugely more valuable than water. Similarly, trying to value labor based on work is disproven when you observe how much hard work is worthless, like breaking rocks in the hot sun or running up that hill. Those are both hard labor, but you can’t get anyone to pay you very much to do those things, thus disproving the Labor Theory of Value and, incidentally, Marxism. Finally, measuring work we’ve done in terms of hoarded gold is wrong. It’s much more useful to measure work we’ve done in terms of infrastructure, which is, in a large part, _our physical capacity to continue to work_; that is, our stored value is the stuff we have now which makes us more able to do certain kinds of work than other countries, as shown in knowledge workers other countries don’t have, telecommunications infrastructure other countries don’t have, and so on, not to mention _markets_ other countries don’t have. Irradiating gold is stupidly wasteful, sure, but it wouldn’t destroy the economy because the economy is based on the continued production of goods and services. Getting into what inflation is and what causes depressions gets somewhat mathematical. I’m not going to do it right now. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 23, 2019, 11:47pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/48 "2019-12-23T23:47:13Z")
> [@alterego](#): > > TL;DR If the US were to irradiate its gold, and this were made public, it could crash our economy overnight. The US has about $400 billion in gold reserves. The US GDP is $19,390 billion. If all the gold in the Fort Knox, about $200 billion, were to vanish tomorrow, it wouldn’t even be a blip. Heck, the stock market probably goes down by $200 billion on a bad day. Facebook alone went down by $119 billion in one day earlier this year. The economy couldn’t care less about gold. Or about the opinions of people who aren’t economists. ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [December 24, 2019, 12:52am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/49 "2019-12-24T00:52:30Z")
> [@Exapno\_Mapcase](#): > > The US has about $400 billion in gold reserves. > > The US GDP is $19,390 billion. And this is why we can’t go on the gold standard. It’s why no modern economy can go on the gold standard: Gold is too damn small, as a fraction of all the resources a country can have or make or do, and tying the complete value of the modern economy to gold would strangle it. An official gold economy would die and be replaced by a black market economy which can keep pace with actual economic activity, but not before crashing that activity and causing untold hardship. The black market economy itself would be a cause of massive problems, due to lack of regulation, but not having an economy isn’t an option, and neither is having an economy which can’t adequately serve the economy’s activity. Cooling off the economy when it’s overheated is a good thing. Goldbugs, however, are attempting to treat everything, from a fever to a mild chill, with a naked stroll in a blizzard in the heart of Antarctica. They have precisely one prescription and it’s never the right answer. ---
**Author:** ![RioRico](https://avatars.discourse-cdn.com/v4/letter/r/f04885/32.png) [@RioRico](https://boards.straightdope.com/u/RioRico)\ **Post date:** [December 24, 2019, 1:39am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/50 "2019-12-24T01:39:11Z")
I grew up near Los Angeles long ago. At bedtime I pretended to sleep, then tuned my crystal set to Night Owl Parade. Many adverts were from realtors selling dream Mojave Desert properties, and goldbugs. A couple decades later the radio format had changed but the same ads proliferated - the same realtors, the same goldbugs. (I almost fell for one of the realtors.) Many decades later (NOW!) I no longer listen in but online browsing hits the same stuff. RELAX IN BEAUTIFUL JOSHUA TREE! I tried that. PREPARE FOR THE COMING CRASH! Sure, any day now… Civilization has not yet collapsed. Realtors are happy and richer. Goldbugs are unhappy and no richer. A computer store owner I knew back when PCs were new and hot said he’d wished he’d bought a fast food franchise instead because the cashflow would have been better. If goldbugs were smart investors, they’d run McFood shops. ---
**Author:** ![alterego](https://avatars.discourse-cdn.com/v4/letter/a/6bbea6/32.png) [@alterego](https://boards.straightdope.com/u/alterego)\ **Post date:** [December 24, 2019, 1:44am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/51 "2019-12-24T01:44:14Z")
> [@Derleth](#): > > Obviously. > > Essentially none of this is right, especially the Goldfinger bit at the end. Value is down to perception; see the diamond-water paradox, where water is almost infinitely more useful than diamonds, but diamonds are hugely more valuable than water. Similarly, trying to value labor based on work is disproven when you observe how much hard work is worthless, like breaking rocks in the hot sun or running up that hill. Those are both hard labor, but you can’t get anyone to pay you very much to do those things, thus disproving the Labor Theory of Value and, incidentally, Marxism. Finally, measuring work we’ve done in terms of hoarded gold is wrong. It’s much more useful to measure work we’ve done in terms of infrastructure, which is, in a large part, _our physical capacity to continue to work_; that is, our stored value is the stuff we have now which makes us more able to do certain kinds of work than other countries, as shown in knowledge workers other countries don’t have, telecommunications infrastructure other countries don’t have, and so on, not to mention _markets_ other countries don’t have. > > Irradiating gold is stupidly wasteful, sure, but it wouldn’t destroy the economy because the economy is based on the continued production of goods and services. > > Getting into what inflation is and what causes depressions gets somewhat mathematical. I’m not going to do it right now. A simultaneous global EMP will crush the economy, deflate the dollar, and leave the USA using its **strategic reserves of gold** , delivered to your doorstep by the USPS, perhaps on horseback, in order to create a new, isolationist economy overnight. They can even print a new currency, and almost certainly have already printed one. We are approaching $1T in yearly defense appropriations. If you think we haven’t game theoried out what happens in that situation A) your crazy and B) since it is your first time thinking about it, what do you expect we will do if not establish our own new currency that is not subject to foreign influence? ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [December 24, 2019, 2:15am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/52 "2019-12-24T02:15:28Z")
> [@alterego](#): > > A simultaneous global EMP will crush the economy, deflate the dollar, and leave the USA using its **strategic reserves of gold** , delivered to your doorstep by the USPS Wait a moment…you are positing a civilization ending catastrophe that somehow simultaneously leaves sufficient government infrastructure to pick right back up on a gold standard? Which is it? Is this disaster really serious or isn’t it? You are making up a very unlikely scenario - a disaster that is just disastrous enough to affect the underpinning of our economic interactions not just with other nations but with each other but not quite disastrous enough to affect our government’s ability to function. That’s a very tight rope to walk. In fact, it may not be possible. Such a disaster cuts communications links. The first few years are going to be food and bullets, not philosophical discourse on economic theory. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 24, 2019, 2:56am UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/53 "2019-12-24T02:56:09Z")
> [@alterego](#): > > A simultaneous global EMP will crush the economy, deflate the dollar, and leave the USA using its **strategic reserves of gold** , delivered to your doorstep by the USPS, perhaps on horseback, in order to create a new, isolationist economy overnight. Assuming everything else you posit happens, why in Og’s name would the government deliver its strategic reserves to your doorstep? Why, why, why, why? ---
**Author:** ![l0k1](https://avatars.discourse-cdn.com/v4/letter/l/bb73d2/32.png) [@l0k1](https://boards.straightdope.com/u/l0k1)\ **Post date:** [December 24, 2019, 2:05pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/54 "2019-12-24T14:05:23Z")
> [@Exapno\_Mapcase](#): > > Assuming everything else you posit happens, why in Og’s name would the government deliver its strategic reserves to your doorstep? > > Why, why, why, why? Like I said, Lord Humongous. Not happy until they’re king of the wasteland. In this scenario, Kevin Costner delivers gold to them, and they never have to spend a night in the barrel. ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [December 24, 2019, 6:50pm UTC](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043/55 "2019-12-24T18:50:21Z")
> [@alterego](#): > > A simultaneous global EMP will crush the economy, deflate the dollar, and leave the USA using its **strategic reserves of gold** , delivered to your doorstep by the USPS, perhaps on horseback, in order to create a new, isolationist economy overnight. They can even print a new currency, and almost certainly have already printed one. We are approaching $1T in yearly defense appropriations. If you think we haven’t game theoried out what happens in that situation A) your crazy and B) since it is your first time thinking about it, what do you expect we will do if not establish our own new currency that is not subject to foreign influence? Gold is definitely subject to foreign influence. Gold is found all around the world, and the amount of gold in known, proven mines affects the price of gold everywhere. Further, a country dumping its gold reserves affects the price of gold everywhere. The only kind of money which _isn’t_ subject to foreign influence is a fiat currency under the control of a national bank, which can be inflated and deflated by that bank, and which also isn’t traded on forex markets or otherwise exchanged with other currencies. Such a currency would be monumentally stupid, but so’s the idea that gold is not subject to influences outside your home country. The rest of your scenario is too stupid to refute. [Previous page](https://boards.straightdope.com/t/how-can-you-measure-whether-the-total-accounted-for-gold-increases-faster-than-gold-is-mined/845043.md?page=2)