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Author Topic: Hypothetically, if a large enough gold deposit was found, could it cause economi  (Read 2572 times)
johnyj
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June 12, 2014, 09:39:16 PM
 #41

In California gold rush, the gold price did not crash hard, instead, the whole west coast were built. It clearly reflected that in people's consensus, gold is money, more gold = more money, more money = richer

But economists say that more money will cause inflation, because fiat money's value purely comes from it being used to trade, it has no other use, more fiat money = more spending = inflation, but more gold will not cause more spending, since it holds value long term wise, the extra gold will just be hoarded


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ljudotina
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June 12, 2014, 10:35:50 PM
 #42

In California gold rush, the gold price did not crash hard, instead, the whole west coast were built. It clearly reflected that in people's consensus, gold is money, more gold = more money, more money = richer

But economists say that more money will cause inflation, because fiat money's value purely comes from it being used to trade, it has no other use, more fiat money = more spending = inflation, but more gold will not cause more spending, since it holds value long term wise, the extra gold will just be hoarded



Gold rush is nowhere near to what OP described (gold as much as dirt). That would destroy price of gold to price of dirt (we use dirt too you know...for growing food etc.)
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June 13, 2014, 02:52:14 AM
 #43

If such a deposit was found, companies with vested interests in the price of gold remaining high would keep the news hush hush and hoard what was found, much like what is happening with diamonds today.

In today's 24 hour news cycle it would be very difficult to keep this kind of information private, especially from people who make a living off of trading gold.

The price would not be affected unless the entity mining the gold were to sell it in the open market in mass.

If the company/entity that mines the gold were to hold it as an investment then the price would not be effected, as neither supply nor demand would have changed.
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