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Suppose an infinite reserve of gold was found. What would be the consequences to the economy in general. Would it have major negative effects?

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  • $\begingroup$ what a fantastic question... $\endgroup$ – amphibient Jun 2 '17 at 17:21
  • $\begingroup$ The question did not specify an extraction cost. In this case, "reserves" is ambiguous. For the mining industry, reserves represent gold ore that still needs to be processed; there will be a processing cost, even if the ore is "unlimited" (of course, the mass of the Earth is finite). The other usage of "reserves" might be associated with above-ground processed gold in bank reserves, in which case the cost of extraction is zero. The answer partly depends on which definition is used. $\endgroup$ – Brian Romanchuk Jun 3 '17 at 2:27
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    $\begingroup$ This question has already been answered here. $\endgroup$ – Jack Block Jun 3 '17 at 7:03
  • $\begingroup$ The person that found it would be very wealthy. It does not exists and if found they would not just dump the gold on the market. $\endgroup$ – paparazzo Jun 7 '17 at 0:59
  • $\begingroup$ no it's open to everybody, that's the point $\endgroup$ – slashbubblecrunch Jun 7 '17 at 11:20
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The gold will be free. (price 0 not anymore rare).

banks and others institutions will found others stuff for having reserve. ( platinum, silver, grains, maybe one day water ).

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  • $\begingroup$ yes but I imagine there will be impacts on the distribution of wealth. What will happen to GDP, it shouldn't decline should it? It seems paradoxical that the economy is based on expectations. This answer is very rudimentary and stating the obvious $\endgroup$ – slashbubblecrunch Jun 2 '17 at 22:26
  • $\begingroup$ except for the statement about use of water $\endgroup$ – slashbubblecrunch Jun 2 '17 at 22:27
  • $\begingroup$ i don't think there is a link with GDP in sense of, at the moment when someone discover an infinite amount of gold, the price will go zero for some gold reserves and people, but if you look at the macro indicators for example in the US it is the consumption of the Household which is the major part of the GDP.So like i said some people and some states will lost some wealth but most of institution and people will found quickly an other thing for have a rare reserve.No Crash.Note : In economy - two things- everything is "obvious" - people tend to make complex the "obvious". $\endgroup$ – Patrick Moumiet Jun 7 '17 at 13:10
  • $\begingroup$ yeah, what about the fact that enormous amount of government wealth is stored in bullion vaults? $\endgroup$ – slashbubblecrunch Jun 13 '17 at 16:12
  • $\begingroup$ how would banks prove their wealth? $\endgroup$ – slashbubblecrunch Jun 13 '17 at 16:13

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