Philosopher\'s stone

[jkaler48]

Since RAT members are way smarter than most people what do you think would be the result if:

Someone secretly found a way to make gold for $100.00 an ounce, bought some defunct gold mines to hide the secret and sold as much gold as they could for CASH (dollars or Euros or Pounds or whatever)and then after expenses secretly destroyed the cash. (Recycling the paper pulp of course)(perhaps a cardboard box plant)

Effects on gold prices?
Effects on the economy (economies)?
Effects on the value of the currency (currencies)?

[Epictetus]

1. If they could produce a significant amount, they could conceivably increase the supply enough to push down gold prices.
2. I don't see much impact on the economy. The gold market, including related derivatives like gold futures, is relatively small compared to other markets, like equities, bonds, currencies and money market instruments.
3. Cash, or M1, is also a relatively small portion of the total money supply. In fact, central banks don't even bother controlling it: they simply print what the public demands. The majority of dollars, or euros, or pounds, are never physically manifested. It is all book-keeping in banks.

Edit: And when I say "control" cash, I mean they don't use it in monetary policy. Of course they control it, but the supply of physical bills is so low as to not be relevant in increasing or decreasing the money supply.

[Dan D'Silva]

If someone created a real philosopher's stone, I'd be much more interested in the part about immortality :twisted: