Future $Economic Crash$ In The Honorverse? . . .

Jonathan_S wrote:

cthia wrote:
It'd be interesting to know whether gold would retain its value in an Honorverse.

I doubt it. There might not be a high concentration of gold in a system's asteroids; but the mining technologies are so efficient that it should still be quite plentiful. And it's really only gold's scarcity that makes it expensive.

It has some valuable properties for electronics (but possibly not so much by the time you're dealing with superconductors and molycircs. Otoh there is probably still expensive gold jewelry; but expensive for the workmanship and aesthetic qualities, not the inherent cost of the material.

kzt wrote:Iirc, all the gold in the world (coins, jewelry, etc) would not fill an Olympic swimming pool.

Many online sources give essentially the same value for the total stocks of above-ground gold; it was about 157,000 metric tons by 2007. If the density of gold is 19.3 grams per milliliter, or 0.0193 tons per liter, then ... we get about 8.2 million liters of gold. If an Olympic-sized swimming pool has a volume of 2.5 million liters, then we divide and get our answer.
So we would need 3.27 swimming pools to hold the entire global supply of gold, which some argue is the entire amount of gold mined since before the Egyptians began mining gold before 2000 BC.

Estimates range from 155,244 tonnes, marginally less than the GFMS figure, to about 16 times that amount - 2.5 million tonnes.

cthia wrote:

Jonathan_S wrote:I doubt it. There might not be a high concentration of gold in a system's asteroids; but the mining technologies are so efficient that it should still be quite plentiful. And it's really only gold's scarcity that makes it expensive.

It has some valuable properties for electronics (but possibly not so much by the time you're dealing with superconductors and molycircs. Otoh there is probably still expensive gold jewelry; but expensive for the workmanship and aesthetic qualities, not the inherent cost of the material.

My take on it as well. With so much gold inevitably found in mining, the Solarian markets have undoubtedly been flooded and gold is probably cheaper than peanuts. Which begs to answer the question of what backs the Solarian credit? What's in Fort Knox now? Or is it Fort Nots.

The problem with gold in electronics now is that it's nearing $1500 an ounce. Companies are looking into designer materials instead. A flooded gold market in an Honorverse would be a boon to the electronics industry.

kzt wrote: So adding a few thousand tons per system to this isn't going to make it cheap.

Jonathan_S wrote:

cthia wrote:My take on it as well. With so much gold inevitably found in mining, the Solarian markets have undoubtedly been flooded and gold is probably cheaper than peanuts. Which begs to answer the question of what backs the Solarian credit? What's in Fort Knox now? Or is it Fort Nots.

Presumably the same thing that backs every modern currency; the GDP of the issuing government and the belief that they'll stand behind their money (and the implicit belief that they won't make surprise catastrophic changes to their monetary policy that would destroy the currency's value before holdings of it could be liquidated)

Fletcher Wendell came to his wife's rescue, sort of. "Back before the Ring of Fire, there was a bank in Washington that had a bunch of fairies with magic wands. They made new money when they were happy, and made it disappear when they were sad. Apparently, when the Ring of Fire happened, one of those fairies was in town, and it now resides in the Grantville bank."
"Daaad!" Judy the Younger complained, while her older sister Sarah smirked.
"I take it," said Daaad, "that you don't believe in Federal Reserve Fairies? That's just the problem, don't you see? Neither do the down-timers, at least not yet. Part of my new job with the finance subcommittee is to keep the Federal Reserve Fairies happy. Another part is to convince the Germans and all the other down-timers that they are real, because they perform a very important function and it only works really well if most people believe in them."
...
"Ah, but the down-timers don't have any money," Fletcher put in with a grin. "At least, not American money. So right now, everyone is trying to figure out how much of our money their money is worth, and vici verci. Which is where the Federal Reserve Fair—" Fletcher paused, casting an overdone look of meek submission at his wife. "Ah, the bank comes in."
"Oh, go ahead Fletcher," Judy the Elder put in, with an equally overdone, long-suffering sigh. "You won't be satisfied till you've run those poor fairies into the ground."
"Not at all. I'm very fond of the Federal Reserve Fairies. They do the kind of magic we need done." He smiled cheerfully at his daughters. "The thing about the Fed Fairies is they hate it when prices go up too fast. It makes them very sad, and they wave their magic wands, and make the bank have less money. Then the bank charges more interest when it loans out what money it does have. What makes the Fed Fairies really happy, is when prices stay the same, or go down. When that happens, they can't help themselves, they just have to wave their magic wands to make more money. As a matter of fact, they look into their crystal balls to see what the prices will be like months or even years in the future, and wave their magic wands in response to what they see. At least they did before the Ring of Fire. I think the crystal ball must have gotten bumped or something cuz the predictions we're hearing at the subcommittee meetings are bouncing all over the place. So one of the things we're working on is trying to determine the 'real' value of all the goods and services within the Ring of Fire, measured in up-time money, so we can help the Fed Fairies figure out which way to wave their wands."
His face grew comically lugubrious. "Now, when people don't believe in the Fed Fairies, they have to come up with some other explanation for where the money comes from. Like, 'The Government.' The problem is, governments always need money, and if they can make it themselves, well, people are afraid they will. And that they will keep on making more of it until it takes thousands of dollars to buy a ham sandwich. So, an important part of my new job is to convince the down-timers that Mike Stearns can't just make more money whenever he wants to. That, instead of the government making the decisions, the Fed Fairies will decide how much American money there is, so they can trust American money to hold its value."