Monday, September 6, 2010

You can't eat gold

Prof. Bainbridge wonders whether Fort Knox, Kentucky, actually contains any gold. And the answer is no, because the US gold repository is not on Fort Knox. It simply adjoins the Army post. But let that pass.

The good professor writes:

Ron Paul thinks there needs to be an audit to see if there's really any gold in Fort Knox. The utility of gold as a store of value has always puzzled me, although I must confess to having done less well in Econ 102 than I did in Econ 101, so there you have it.
He then proceeds to relate the story of "Terry Pratchett's wonderful Discworld novel Making Money," in which character Moist von Lipwig, charged with securing the nation's gold, discovers there is no gold. An interview with "crack reporter Sacharissa Cripslock" ensues:
"The world is full of things worth more than gold. But we dig the stuff up and then bury it in a different hole. Where's the sense in that? What are we, magpies? Is it all about the gleam? Good heavens, potatoes are worth more than gold!"

"Surely not!," [said Ms. Cripslock]

"If you were shipwrecked on a desert island, what would you prefer, a bag of potatoes or a bag of gold?," [replied Moist]

"Yes, but a desert island isn't Ankh-Morpork!"

"And that proves gold is only valuable because we agree it is, right? It's just a dream. But a potato is always worth a potato, anywhere. A knob of butter and a pinch of salt and you've got a meal, anywhere . Bury gold in the ground and you'll be worrying about thieves for ever. Bury a potato and in due season you could be looking at a dividend of a thousand per cent."

"Can I assume for a moment that you don't intend to put us on the potato standard?" said Sacharissa sharply.
Eleven millionaires went down with the Titanic in 1912. One who survived was A.H. Peuchen, who said that he left $300,000 in money, jewelry, and certificates in a lockbox box in his cabin. "The money seemed to mock me at that time," he said. "I picked up three oranges instead."