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Comment by consp | Hacker News Reader

No, but "removing" around half of it from one place is quite a bit. Though I doubt any single physical kg ever moved more than a few meters to the buying countries vault. edit: They physically moved 27 tons, the rest was traded away and bought again in London.

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If they sell enough of it in the US and buy enough in London, traders who take the other side of that position will physically move it to London.

That's exactly the service the commodities markets provide: they will absorb a small trade without anyone incurring the costs of shipping precious metals, and they know who to call to get it shipped once there's enough supply/demand imbalance to make shipping it worthwhile.

In times of crisis it can be physically moved, e.g. under threat of Nazi invasion in 1939-1940 the UK physically moved over 1,500 tonnes of gold from London to Canada ("the largest known movement of physical wealth in history"[0]), and infamously at the start of the Spanish Civil War the Spanish physically moved 510 tonnes of gold from Spain to the Soviet Union (never to see it again[1]).

[0] https://en.wikipedia.org/wiki/Operation_Fish

[1] https://en.wikipedia.org/wiki/Moscow_Gold_(Spain)

The Spanish case shows how tricky it is to sell your gold. Suddenly other countries found out that Spain had money from liquidating its gold and milked it dry.

Given Spain’s history it is incredible that the gold collected over centuries was spent in a few years.

The wiki article is very carefully tip toeing that there is no evidence that the Soviets defrauded or abused the Spanish, but it is hard to believe that 72% of the world’s gold reserves were visibly spent in a few years.

I did not investigate further but I understood the documents are not completely public, and my conspiracy hat tells me that is because it is a national humiliation.

At the time the Soviet Union had the Spanish government over a barrel because they were the only people who could/would supply significant quantities of desperately needed weapons (the opposing Nationalists were better equipped for reasons I'm not entirely sure of).

This also contributed significantly to the Communist (Stalinist) faction winning the internecine struggle on the left against the Anarchists and Trotskyists, but the quid pro quo was loyalty to the Soviet Union.

In hindsight we know they lost anyway, so this seems really silly, but at the time everyone involved believed they were in a completely existential struggle against fascism that was more important than literally anything else.

For anyone interested Orwell's Homage to Catalonia is an excellent book although it's just one man's perspective and may not be entirely historically accurate

There's a good film about Norway getting their gold out ahead of the Nazis. Gold Run I think it's called.

That's the fun thing about gold. It's literal gold, not numbers on a spreadsheet. Moving it really means moving it: bars are stamped and owned, and if the owner wants to move them, those bars need to get transported to wherever the owner says they should be.

It's also the idiotic thing about gold, a metal that has no more or less inherent monetary value than a fiat currency =)

That is the non idiotic thing about gold, since it is not fiat, is not easy to produce, and it is easy to verify, it can be used as a currency in less stable times/places. It’s a redundancy. Perhaps bitcoin satisfies many of these properties without the high costs to secure and move gold, but it needs electricity and a network?

https://www.macrotrends.net/1335/dollar-vs-gold-comparison-l...

Gold is a fiat currency because it has no inherent value.

That is not what fiat currency means.

https://en.wikipedia.org/wiki/Fiat_money

Gold has a lot of material uses, eg computer chips and other electrical equipment for starters.

>inherent monetary value

I agree, the price of gold depends on demand like everything else. Although gold just has some inherent utility value in addition to scarcity that makes it less likely for the price to go to zero, other stuff like cryptocurrency have only scarcity and can go to zero much more easily.

Currency is inherently about trust: you believe it can be traded later for goods. The mechanism with fiat is that you need to trust your state and government.

In gold, you trust that everyone is believing gold has value. And that it is commmon knowledge (in the logic sense [0])

Saying that gold has no more or less inherent monetary value than fiat currency assuming a magic wand that can change a large percentage of people's belief.

[0] https://en.wikipedia.org/wiki/Common_knowledge_(logic)

Ammunition and canned goods actually have inherent monetary value. While not being fiat currency.

Goods have inherent value. We are talking about currency.

gold has quite the inherent value - no oxygen reaction (all electronics) and partly jewelry.

if the gold has cheaper would be used quite alot due to being the only metal not oxidizing (the other one being platinum which is even rarer and comes from the same ore source)

you're confusing "value as a material" with "value as a currency". Currency is made up. Material properties are not. "If gold was cheaper" is literally "yes, everyone could wake up tomorrow and just decide that's the case, and now it is."

Just like a fiat currency.

> It's also the idiotic thing about gold, a metal that has no more or less inherent monetary value than a fiat currency =)

I don’t know why people keep repeating that. Half of gold production is used in industry and for jewellery. And gold has never lost its value the way that some paper currencies have. It’s not like anyone can print gold bars.

The jewellery market stems from the 'inherent' value thing though.

I think the OPs point is that gold is an arbitrary metal that has been infused with value, just like fiat currency is some paper that has been infused with value. Paper also has 'useful' uses, but that isn't underpinning the value of fiat currency.

Yes, I'll grant that gold is stable in that it doesn't corroded , it's somewhat rare, etc, so it is better suited than other metals, there's still no intrinsic reason to value it though.

I don't think this is a hill that either the op or I is willing to die on though. It is an observation of human behaviour, rather than a statement that gold _should not_ be the world store of value.

>Yes, I'll grant that gold is stable in that it doesn't corroded , it's somewhat rare, etc, so it is better suited than other metals, there's still no intrinsic reason to value it though.

...you just provided intrinsic reasons for why gold has value. Humans need to trade, bartering goods and services directly is less efficient than using a currency, and gold has qualities that make it more useful as a currency than other materials. It is the opposite of an arbitrary metal, it is a material that has specific desirable qualities hence chosen to be used as a currency by many societies.

Can’t move what isn’t there

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