# Hypothetical scenario: Man finds 1 billion tons of gold on his land. **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 3, 2014, 5:42am UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337 "2014-09-03T05:42:08Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [September 3, 2014, 1:49pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/21 "2014-09-03T13:49:10Z")
> [@Ravenman](#): > > I bet the landowner would love if the government threatened eminent domain, because the Constitution requires the government to pay “just compensation” for the taking – none of this lowballing crap. Good luck with that. “Strategic resource,” remember? He’ll be lucky to get the land price, and every court in the nation will side with the government. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [September 3, 2014, 1:54pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/22 "2014-09-03T13:54:26Z")
Just for fun, let’s say the guy who finds the gold in his yard lives on an Indian reservation. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [September 3, 2014, 2:14pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/23 "2014-09-03T14:14:02Z")
> [@Lord\_Feldon](#): > > The person or entity who owns the mineral rights. Most likely, someone (or something) did once own the land and the mineral rights, but at some point they sold them to different people. (Because hey, who looks for mineral rights when they’re buying a suburban house on a half-acre lot?) Certainly the deeds on my suburban house in the UK specify that I only own the mineral rights down to a fairly small depth - I can’t remember exactly but something like 200ft. I’m not sure who does own them, but I doubt there’s anything more than gravel down there (lots of gravel pits in my part of the Thames Valley). ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [September 3, 2014, 2:22pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/24 "2014-09-03T14:22:14Z")
> [@jtur88](#): > > Just for fun, let’s say the guy who finds the gold in his yard lives on an Indian reservation. Then the question gets _a lot_ more interesting. 😉 ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [September 3, 2014, 2:23pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/25 "2014-09-03T14:23:59Z")
> [@silenus](#): > > Good luck with that. “Strategic resource,” remember? He’ll be lucky to get the land price, and every court in the nation will side with the government. Are you kidding? The Constitution says, “nor shall private property be taken for public use, without just compensation.” There isn’t any words saying “except for strategic resources.” Plus the fact that you misspelled “eminent domain” doesn’t provide confidence in your interpretation of the law. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [September 3, 2014, 2:27pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/26 "2014-09-03T14:27:24Z")
> [@Lord\_Feldon](#): > > The person or entity who owns the mineral rights. Most likely, someone (or something) did once own the land and the mineral rights, but at some point they sold them to different people. (Because hey, who looks for mineral rights when they’re buying a suburban house on a half-acre lot?) Not at all uncommon for mineral rights to be bought and sold separate from the actual land itself. The land owner isn’t without recourse though; while the landowners have to give the mineral rights owner access to recover their minerals, there’s nothing that says that they can’t charge an exorbitant fee to do, as well as put all sorts of stipulations in the contract about what they can and can’t do on your land, and how they have to remediate any damages, etc… The idea would be to charge just enough to where you don’t deter them from mining/drilling on your land, but enough that you don’t leave money on the table, so to speak. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [September 3, 2014, 2:34pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/27 "2014-09-03T14:34:12Z")
> [@Ravenman](#): > > Are you kidding? The Constitution says, “nor shall private property be taken for public use, without just compensation.” There isn’t any words saying “except for strategic resources.” > > Plus the fact that you misspelled “eminent domain” doesn’t provide confidence in your interpretation of the law. After _Kelo_, nothing is safe and you know it. Stop being obtuse. If all you can do is harp on spelling errors made before coffee, you have even less concept of things than I do. The Constitution means what the courts say it means. “Just compensation” is a flexible term. If 5 Supremes say $1.50 and a bag of Skittles is “just compensation,” then that’s it. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [September 3, 2014, 2:35pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/28 "2014-09-03T14:35:11Z")
> [@Velocity](#): > > Hypothetical scenario: A landowner in rural America finds the mineral discovery of the century: 1,000,000,000 tons of gold on his property, located in a gold vein hundreds of feet underground. > > The world is floored by this news, of course. The value of gold (dollars-per-ounce) plummets drastically worldwide once this discovery becomes public, but the man’s gold deposit is still worth many trillions of dollars. 1 billion tons of gold will drive the price down so far his mountain will be pretty much worthless. Economies all over the world will be in shambles, and if he’s lucky the government will take the land off his hands at market value and turn it into the Gold Mountain National Nuclear Waste Depository, rendering that landowner’s find useless and patching up the world’s economy. ---
**Author:** ![MacTech](https://avatars.discourse-cdn.com/v4/letter/m/c0e974/32.png) [@MacTech](https://boards.straightdope.com/u/MacTech)\ **Post date:** [September 3, 2014, 2:47pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/29 "2014-09-03T14:47:58Z")
The first rule of Dig Club is You Do Not Talk About Dig Club! The second rule of Dig Club is You DO NOT TALK About Dig Club!! I wouldn’t tell anyone, mine and sell small amounts on my own, the stupid government can go sit and spin, my land, my property, nothing good comes of alerting any authority… ---
**Author:** ![Grrr](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/grrr/32/146_2.png) [@Grrr](https://boards.straightdope.com/u/Grrr)\ **Post date:** [September 3, 2014, 2:48pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/30 "2014-09-03T14:48:39Z")
> [@Czarcasm](#): > > 1 billion tons of gold will drive the price down so far his mountain will be pretty much worthless. Economies all over the world will be in shambles, and if he’s lucky the government will take the land off his hands at market value and turn it into the Gold Mountain National Nuclear Waste Depository, rendering that landowner’s find useless and patching up the world’s economy. I don’t know about that. I think gold in the regard that you speak of is pretty much symbolic by this point isn’t it? Does any body really believe that for every dollar that exist in the world, there’s X amount of gold locked away in Fort Knox? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [September 3, 2014, 2:48pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/31 "2014-09-03T14:48:41Z")
> [@silenus](#): > > After _Kelo_, nothing is safe and you know it. Stop being obtuse. If all you can do is harp on spelling errors made before coffee, you have even less concept of things than I do. The Constitution means what the courts say it means. “Just compensation” is a flexible term. If 5 Supremes say $1.50 and a bag of Skittles is “just compensation,” then that’s it. Since it is evident that you don’t have a firm understanding of the issues at hand, I’ll let your conspiracy theory-like interpretation of rather straightforward legal issues speak for itself and drop this hijack. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [September 3, 2014, 2:53pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/32 "2014-09-03T14:53:44Z")
> [@MacTech](#): > > The first rule of Dig Club is You Do Not Talk About Dig Club! > The second rule of Dig Club is You DO NOT TALK About Dig Club!! > > I wouldn’t tell anyone, mine and sell small amounts on my own, the stupid government can go sit and spin, my land, my property, nothing good comes of alerting any authority… I’m with you, but in the OP’s scenario the landowner already blabbed to the entire world…meaning his life is pretty much fucked. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [September 3, 2014, 3:06pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/33 "2014-09-03T15:06:44Z")
> [@Czarcasm](#): > > 1 billion tons of gold will drive the price down so far It would drive the price down so far that goldbuggery would be dead forever: 1 billion tons is 2 trillion pounds, which is 32 trillion ounces. Given that gold currently trades ad \>$1200/ounce…well, you get the idea. There aren’t enough fungible assets in the world to value gold at more than a few bucks _a pound_ if such a discovery became known, and pennies per pound would be more like it. > [@](#): > > his mountain will be pretty much worthless. A billion tons of any useful mineral would still be worth a considerable personal fortune. Suppose the price of gold crashed to 1¢ per pound. He’s still got $20 billion worth of gold. > [@](#): > > Economies all over the world will be in shambles, and if he’s lucky the government will take the land off his hands at market value and turn it into the Gold Mountain National Nuclear Waste Depository, rendering that landowner’s find useless and patching up the world’s economy. Why would this affect national or global economies? No major nation bases its currency on gold anymore; that went out back in the 1930s. People with futures contracts on gold would experience sudden changes in wealth - though which way would depend on which end of the contract they were on. But that wouldn’t crash anyone’s economy. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [September 3, 2014, 3:06pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/34 "2014-09-03T15:06:48Z")
Remember Sutter’s Mill and the California Gold Rush? The sawmill where gold was first discovered was owned by John Sutter and James Marshall. Neither of them ever really profited from the gold rush. So it’s likely that the landowner in the hypothetical isn’t going to either. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [September 3, 2014, 4:02pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/35 "2014-09-03T16:02:58Z")
Just to keep running with the numbers, Wikipedia says approximately 174,100 tons of gold have been mined in all of human history. So we’d have 5,700 times as much known gold in the world after such a discovery as before. Even if the price of gold was based on utility rather than whatever combination of hedging and goldbuggery, it would decline pretty drastically. A billion tons of gold would take up ~53 million cubic meters, which if I’m doing the arithmetic correctly would get you a cube of gold about 575 feet in each dimension. A pretty damn big cube, but easily small enough to fit under one farmer’s 160 acres. (One side of the cube would be nearly 8 acres in size.) ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [September 3, 2014, 7:36pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/36 "2014-09-03T19:36:42Z")
> [@Gatopescado](#): > > Sounds like a nice piece of land. > > I’d build a motocross track. Paved with solid gold, of course. ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [September 3, 2014, 7:46pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/37 "2014-09-03T19:46:53Z")
> [@Dewey\_Finn](#): > > Remember Sutter’s Mill and the California Gold Rush? The sawmill where gold was first discovered was owned by John Sutter and James Marshall. Neither of them ever really profited from the gold rush. So it’s likely that the landowner in the hypothetical isn’t going to either. Story as I’ve heard it told went like this: The gold was first discovered by some hired hand, whose first response was to run into town, madly shouting through the streets: **GOLD! GOLD! I’VE FOUND GOLD! THERE’S GOLD IN THEM THAR HILLS!!!** Smart. Really really smart. Exactly what the gold-endowed landowner in the OP is being told NOT to do! ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [September 3, 2014, 7:50pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/38 "2014-09-03T19:50:21Z")
> [@silenus](#): > > They wouldn’t have to do that. IRL, the government would seize the land as a strategic resource, ala uranium, station a company of Rangers on it to keep people away, pay the landowner a lump sum ($100 million if he goes quietly, just the book value of the farmland if he pushes it) and that would be that. Imminent Domain trumps anything. That seems unlikely. As has been said, the simple existence of so much gold will crash the price. Why make themselves look bad for so little gain? Gold _isn’t_ a strategic resource. Certainly not in this scenario, and not really in real life. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [September 3, 2014, 7:52pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/39 "2014-09-03T19:52:48Z")
I wonder what the aftermath would be. If gold was cheap, how might it be used commonly in homes? For example, I suppose it would be too soft as a replacement for aluminum foil. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [September 3, 2014, 11:14pm UTC](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337/40 "2014-09-03T23:14:03Z")
This leads to an interesting question: Is it possible that 1 million tons of gold is worth more than 1 billion tons, due to higher perception of scarcity? [Previous page](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337.md?page=1) [Next page](https://boards.straightdope.com/t/hypothetical-scenario-man-finds-1-billion-tons-of-gold-on-his-land/697337.md?page=3)