Counterfeiting and Gold Making in Harry Potter

[TroyGuffey]

Originally Posted by Irish Wolf

I would like to note, however, that here in the US we generally don't arrest people because of what they might do. Were Mr. Flamel to come here and actually start using the Philosopher's Stone to flood the US market with gold, the MSS would certainly move on him - but arresting him simply for having the ability to do this would be akin to arresting CNC lathe operators because they have the capability of creating printing plates for US currency, or outlawing high-resolution double-sided color photocopiers because some people were able to use them to make fair reproductions of money.

A point I didn't make in my original post is that Flamel is essentially a gold miner, which is not illegal in any way. Making gold makes a commodity, not fiat money.

[malloyd]

Originally Posted by TroyGuffey

A point I didn't make in my original post is that Flamel is essentially a gold miner, which is not illegal in any way. Making gold makes a commodity, not fiat money.

When are these set anyway? While I can't speak to the Potterverse, here in the real world nobody on the planet has been been on a precious metal standard for the last 40 years or so. So metals transmutation is a complete non-issue as far as anybody's actual monetary systems are concerned.

[Mylon]

Gold is still tied to currency, but in a roundabout way. When currency falls or to protect against inflation, people buy into gold. It's much less volatile than other markets, where supply can increase rapidly.

Someone did make an earlier point about arresting someone on what they might do, that being gun laws in the UK. By itself the gun is just a tool, but possessing one is a crime based on what could be done with it. (Like this story)

In years when the growth of the economy outstrips the addition of 'natural' gold into the money supply, the philosopher's stone would be used to create more gold. When economic growth is slower - compared to the addition of 'natural' gold - the philosopher's stone will not be used as much.

Curiously enough, this is the opposite of what actually happens. To stimulate growth, a bunch of money gets thrown at the economy. To reign in and prevent overblown speculative markets, money is added more slowly. Current situation being a big oops, I guess.

[Irish Wolf]

Originally Posted by Mylon

Someone did make an earlier point about arresting someone on what they might do, that being gun laws in the UK. By itself the gun is just a tool, but possessing one is a crime based on what could be done with it. (Like this story)

Wow, no wonder the author of the story thought we'd bust Flamel in the States for just owning the Philosopher's Stone! That's some seriously draconian legislation, there...

No, here in the States, unless the item is on a very short list of banned items (hand grenades, fully-automatic firearms, and certain forms of explosives), you don't get in trouble for having something, just for misusing it. (For instance, you can make an impressive fuel-air bomb from ammonia and nitrates - but you can also make an impressive fertilizer. Arresting people for possessing ammonium nitrate because it could be used to make a bomb would leave us pretty hungry after a while...) The soldier in the story, had he been in the States, would have been congratulated for turning in the sawed-off (illegal in most municipalities), and in some places rewarded, with no questions asked about where it came from.

Note further that it is possible to get federal licenses to possess most of the banned items, as well - I know a collector with a federal license for full-auto weapons. Under the Brady Bill, he tells me, it became a crime if he ever placed the magazine into his Uzi...

[malloyd]

Originally Posted by Mylon

Gold is still tied to currency, but in a roundabout way. When currency falls or to protect against inflation, people buy into gold.

Only in the sense that say oil, or wheat, or pottery clay are tied to currency. It trades just like any other commodity

It's much less volatile than other markets

Stable being defined as "doesn't vary by more than a factor of 3 in any given year, well usually"?

Not that the recent spike hasn't been nice if you were holding a lot of gold, but this statement is nonsensical. Precious metal prices fluxuate a *lot*. The reason you hedge in them is they tend to be countercyclical - up when everything else is down and vice-versa, not because they are remotely stable.

[Agemegos]

Originally Posted by Irish Wolf

Wow, no wonder the author of the story thought we'd bust Flamel in the States for just owning the Philosopher's Stone! That's some seriously draconian legislation, there...

Backed up by Draconian police, a Draconian Crown prosecutor, and a Draconian jury.

Next time that bloke finds an illegal weapon he'll sell it on the black market: might as well be hanged for a sheep as hanged for a lamb.

[Koshka]

Originally Posted by TroyGuffey

A point I didn't make in my original post is that Flamel is essentially a gold miner, which is not illegal in any way. Making gold makes a commodity, not fiat money.

I only have KS:Potterverse as an Everyman, but assuming the gold produced by the Stone is in nuggets or flakes there's no real difference between Flamel and someone who goes out panning on the weekends. If he's selling it, the police might check up on him to be sure "Philosopher's Stone" isn't a euphemism for "robbed 18 jewelry stores last week".

If Flamel's producing coined gold, then I can see the Magical Secret Service getting on his case. That was a major no-no in the days of the gold standard, and would still be one in the gold-based wizarding economy. Or, if Stone-created gold is "temporary", he could get the Magical Bureau of Investigation after him for fraud.

[TroyGuffey]

Originally Posted by Koshka

If Flamel's producing coined gold, then I can see the Magical Secret Service getting on his case. That was a major no-no in the days of the gold standard, and would still be one in the gold-based wizarding economy. Or, if Stone-created gold is "temporary", he could get the Magical Bureau of Investigation after him for fraud.

I assume that Flamel is able to turn any base metal object into gold. Hmmm, maybe turn knuts(bronze) into gold? Although producing gold ingots would probably be the easiest.

As for temporary: Potterverse transfiguration is supposedly able to create temporary or detectably magic "permanent" gold, therefore I believe the PS is a step up from that and the end result is not magically active.

[quarkstomper]

As I understand it, the historical Nicholas Flamel used alchemy as a front for how he was really making money: banking. At the time he lived, lending money at interest was illegal and it was actually safer for people to suspect you of practicing sorcery than of practicing usury.

At least that's what I've read.

[Rocket Man]

Originally Posted by quarkstomper

As I understand it, the historical Nicholas Flamel used alchemy as a front for how he was really making money: banking. At the time he lived, lending money at interest was illegal and it was actually safer for people to suspect you of practicing sorcery than of practicing usury.

At least that's what I've read.

So if he'd lost interest, he would never have taken it up? ;)