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42 sats \ 14 replies \ @grayruby 14h \ parent \ on: Could an Increase in the Supply of Gold Cause a Boom-Bust Cycle? econ
I think it is less likely but it is feasible especially if it was a large increase in supply in a short period of time.
Yes, this sort of inflation occurred to the Spanish Empire, when they brought back the American gold from their Conquest. It was not something that was slowly mined, but stolen all at once from the original owners.
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They also had an issue of widespread price controls (just prices) that made economic adjustments almost impossible.
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Price controls? Where did I just hear about those? <sarcasm>Oooohhhhhh ….. wasn’t that what Harris was suggesting for housing rents? They must have found some loop hole in economic law to get around all the problems involved. </sarcasm>
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The most important element, I think, is that it be an unanticipated increase. There are some huge known gold deposits that are not yet being developed, but the market follows them and people are aware of how likely production is.
However, something like a solid gold asteroid crashing to Earth would discoordinate a gold standard economy.
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As long as people had to work to extract the gold, I don’t think there is a problem. The miners, again, are exchanging something for something. The asteroid scenario, if the gold was really easily obtained may cause inflation, but not the same as stealing it by force (Conquest).
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I agree that it's ethically different. There's nothing unjust about this kind of inflation, but it will disrupt savings/investment in a systematic way, which is what causes business cycles.
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Is the quantity of new-found gold large enough to drastically increase the supply of gold? Perhaps, the amount of gold to be mined at any one time is not marginally great enough to cause huge percentage swings in the price of money (interest and such).
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It certainly could be. There isn't all that much mined gold on Earth and many asteroids have been found with orders of magnitude more.
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However, we cannot quite grasp them yet and extract the metals. That is for the future and is quite unpredictable.
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Speaking of supply. You are just going to give me 49ers super bowl shares for free? I was going to try to sell a few of my shares but if you are giving me a virtually free call option on the Niners sneaking into the playoffs via a terrible NFC West or the Commanders collapsing and then the Niners going on a run against a bunch of frauds like the Eagles, Vikings and Lions, I am going to take it.
You bid them down to 1% and they are 1 game out in a garbage division. I do think the season is over but 1% is crazy.
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I might have overreacted to their loss, but I'm not too worried about it.
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Especially if Seattle and Arizona lose.
That should just give me better prices on Buffalo and Allen, though.