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Comment by bruce511 | Hacker News Reader

In medievil times Alchemy was the search for changing base metals (mostly lead) into gold. Clearly unimaginable riches would follow.

What they didn't realise was that turning lead into gold does not make lead as valuable as gold. It makes gold as valuable as lead.

This has happened before. Aluminium used to cost more than silver. The Washington Memorial is capped in aluminium for all of about 9 inches high, at fantastic cost.

Development of the Hall process made aluminium plentiful. It's now a cheap house-hold item we discard daily.

If we found a billion tons of gold, the value of gold would crater basically to the cost of actually bringing it to earth. We'd find uses for it (its pretty) but it'd make a terrible building material :)

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What they didn't realise was that turning lead into gold does not make lead as valuable as gold. It makes gold as valuable as lead.

Only if the process was commonly known. Alchemists were quite a secretive bunch. For example, if you asked most people to name a famous alchemist they'd probably come up with nothing, despite Isaac Newton being one. https://en.m.wikipedia.org/wiki/Isaac_Newton%27s_occult_stud...

>Alchemists were quite a secretive bunch.

But they'll surely tell it to their wife and kids at some point. And somebody should leak the recipe.

>Isaac Newton

Oh. :D

> Only if the process was commonly known.

It doesn't matter - even if you're the only one to know the trick, once you start dumping large amounts of gold on the market, its price will start to go down. Gold isn't something that gets easily used up, so the more of it is in circulation, the cheaper it gets.

You'd still make a ridiculous amount of money before that happened.

About as hypothetical argument as having access to billions of tons of gold that no one knows about but are willing to buy it

Steady state thinking. Of course gold would become cheaper, sure. But you will have bought all the actual productive assets first!

This is the same trick economists play when saying "inflation doesn't matter". It doesn't in the steady state, but in the meanwhile, I printed the money and gave it to my friends, who do you think is going to end up owning all the hard assets?

In that time "ownership" of assets was a highly fluid concept. Kings nominally owned all the assets already, and as more than a few discovered, loose is the head that wears the crown.

It's still working for diamonds.

Yeah, human psychology is the real philosopher's stone, huh? Make people feel like it's valuable and it becomes as such. If Graber's work is to be trusted the review of the development of gold as a token of exchange has little to do with its innate properties, and more to do with the fact that the state institutions demanded taxes be paid in said tokens.

Intriguing.

Fair point. Alchemists as good at marketing as DeBeers could make this work.

It would have been nigh impossible to keep it a secret. Locally your sovereign would find about it very quickly. So you're working gorgeous the crown in a short order.

Operational security was also terrible, so it wouldn't have been kept as a secret limited to one country for long.

If you want to profit from making gold, you have to spend gold, and that's going to get noticed very fast. Its not like the common man was spending gold coins on a regular basis.

This plot point in Goldfinger blew my mind as a teenager (spoiler: Goldfinger does not want to steal gold - he want's to make the gold in Fort Knox radioactive, to raise the value of the gold he has). If there is one important subject that is not that hard to understand, but poorly understood by the general public, it's how markets work. I know many well educated people who make trivial mistakes when thinking about markets.

> "What they didn't realise was that turning lead into gold does not make lead as valuable as gold. It makes gold as valuable as lead."

Not if you're the only guy who's figured out how to do it.

I agree with your analysis, but the process might be the most valuable thing here, getting rid of lead.

Would make great reactor shielding, especially due to chemical stability compared to lead.

Finally, toilet seats made of gold can be had by everyone! ;)

And that is why they made the stock exchange ;)

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