The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. The U.S.A (United States of Amestris) operated on this standard, allowing the amestrian dollar to avoid inflation and making it the top reserve currency in the world. However, in 1971, the current fuhrer switched to the fiat standard. This was done to prevent the continued depletion of gold reserves. This allowed the government to print as much money as it wanted, leading to hyper-inflation and the cheapening of the dollar.

The current fuhrer, Donatello Trumpestus, decides to reverse this trend by calling on the state alchemists. Alchemy is the science of transforming on element into another. There are two taboos that alchemists must not break. The first is to not attempt human transmutation, which would lead to the creation of homunculi. The second is to never transmute gold.

Trumpestus has decided to free state alchemists from this second rule, allowing them to create as much gold as the government needs at the time. This has returned confidence in the amestrian dollar because the currency is once again backed up by something physical, and has allowed gold coins to be put back into circulation.

With the alchemists essentially making gold for the state, how can Trumpestus go about returning the world to the original standard to prevent inflation and make anestrus great again?

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    $\begingroup$ If alchemists can make gold, it’s no longer of any use as physical backing for a currency. Gold has little intrinsic value; rarity is all that makes it valuable $\endgroup$
    – Mike Scott
    Sep 4, 2020 at 11:47
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    $\begingroup$ The entire point of the gold standard was that one could not conjure gold out thin air. If gold can be created at will then there is no difference between gold and paper. And the existence of "alchemists" which can create gold absolutely contradicts the goal to "prevent inflation"; you cannot have both at the same time. (Fun historical factoid: the use of money with intrinsic value does not necessarily prevent inflation. For an illuminating example see the wonderfully sad and yet hopeful story of the Spanish Price Revolution.) $\endgroup$
    – AlexP
    Sep 4, 2020 at 12:01
  • $\begingroup$ Depends on how expensive the gold making process is. If it's not MUCH cheaper than mining, disaster may not ensue. Maybe. $\endgroup$
    – Mary
    Sep 4, 2020 at 12:56
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    $\begingroup$ It looks like you're asking about the actions of individuals in an already existing world rather than trying to build your own world. $\endgroup$
    – sphennings
    Sep 4, 2020 at 13:47
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    $\begingroup$ Gold has plenty of uses that are not related to acting as currency, so it actually does have intrinsic value. $\endgroup$
    – EvilSnack
    Sep 4, 2020 at 22:09

5 Answers 5


You haven't re-instituted the Gold Standard, you've turned the Gold Standard into a fiat currency and you've done so with horrifying consequences.

Value is determined by two factors - supply and demand. If you were to increase the supply of gold as the demand stayed the same, the price would drop and then the gold would be devalued. Attempting to switch back onto the gold standard while increasing the world's supply of gold would devalue gold and consequently devalue your own currency - and this is what I would say under normal circumstances. But these aren't normal circumstances.

You've done something far worse. You haven't merely increased the supply of gold, what you've done is you've unleashed the alchemists onto the supply and have created what is an effectively limitless pipeline of potential gold. Everyone now holding gold not only has to contend with the possibility that gold will be worth less, they have to contend with the possibility that gold will be worthless, should the United States of Amestris decide to pump out gold to pay its badly mismanaged debts to other countries. You have, in effect, turned gold into just another fiat currency, now of a country named Amestris because all Amestris money can be swapped for gold. And now that's the case, every other country in the world will stop caring about gold and all the alchemists in those countries can make as much gold as they want, just to screw over Amestris. (Imagine terrorists depositing huge amounts of gold in all major Amestris cities.) You haven't prevented inflation - you've jumpstarted it. By doing these actions, you will very quickly destroy the Amestris economy and create hyperinflation.

In short, printing money doesn't work. Never has, never will.

  • 7
    $\begingroup$ Actually, "printing money" is essential for economic development. The trick is to control very carefully the process, so that inflation does not exceed the optimal value (normally estimated at 2 to 2 and a half percent). The invention of fiat money allowing the expansion of credit is what transformed the sluggish pre-modern economy into the wonderfully abundant world we have today. $\endgroup$
    – AlexP
    Sep 4, 2020 at 12:23
  • $\begingroup$ @AlexP Is this just mainly a matter of practicality since you can't divide a real object into enough small enough chunks that can be practically handled so that everyone who needs to use it in transactions has access to it? $\endgroup$
    – DKNguyen
    Sep 4, 2020 at 13:48
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    $\begingroup$ @AlexP While true, fiat money systems have controls on who can print the money. Unless alchemy has some strange prerequisites that the government can tightly control, you are looking at a system that is about as easy to counterfeit as monopoly money. $\endgroup$
    – Nosajimiki
    Sep 4, 2020 at 13:49
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    $\begingroup$ @DKNguyen: It is a matter of stimulating people (and banks) to invest their funds in something productive, by making sure that hoarding money is a losing proposition. $\endgroup$
    – AlexP
    Sep 4, 2020 at 14:23
  • $\begingroup$ Of course the supply might not be limitless. If they were changing lead into gold, it would be dependent on the supply of lead (and any other ingredients in the process). While the supply of lead is much greater, its strictly speaking not limitless. $\endgroup$
    – user4574
    Sep 4, 2020 at 23:22

Economic perspective: pointless.
Industrial perspective: devastating.

Trade, barter, money... in the end it's all about trust. The "Gold Standard" created the illusion of trust by suggesting that (e.g.) \$1 USD in paper or coinage was backed by \$1 USD in real gold.

And then the value of the U.S. economy exceeded the value of all the minable and mined gold on the planet.

You might not realize that the gold standard dealt with more than just the paper and coins in play. It affected every value transaction. So if, today, a hundred-billion-dollar buy-out occurs wherein no actual paper/coin money is transacted, that would need to be backed by your "gold standard." Every bank account using debit cards would need to be backed, too. All that virtual money — backed by real gold.

Now, you could do it, but only by ascribing to gold such a high value that you can actually back the entire economy with it. You might end up having to claim that an ounce of gold is worth, say, \$100,000.

Of course, the economy might outgrow that arbitrary assignment in a year, but let's roll with it.

Having just forced gold to have a value of \$100,000 per troy ounce in order to force your economy to be based on a gold standard, you just destroyed the computer industry and every other industry that uses gold as part of the manufacturing process. Your \$1,500 computer of yesterday is now \$25,000 because of the gold used in its manufacture. Jewelry is right out.

And that's the biggest problem with any precious-metal-based money system — it forces all industries that depend on that precious metal to follow.

So, from an economic perspective, a gold-standard is pointless because the government would need to assign an ever higher value to the limited amount of gold to account for the increasing value of the economy as a whole.

And from an industrial perspective it's devastating because that forced value makes the goods that depend on gold so expensive that no one can afford them.

  • 1
    $\begingroup$ Actually, the impact would reach far beyond the computer industry, there are far fewer industries that don't depend on computers these days than those that do, and making this move actually means that on average, most of those industries that depend on computers suddenly become less lucrative even in the medium term than simply scrapping all their computers for the gold content. $\endgroup$ Sep 4, 2020 at 21:41
  • $\begingroup$ @AustinHemmelgarn That's a great point. In fact, having lived through copper theft, I could imagine people stealing cell phones just to scrape the gold. Trying to go back on a precious metal standard would be wild. $\endgroup$
    – JBH
    Sep 4, 2020 at 23:32
  • $\begingroup$ Yeeeep, this one. $\endgroup$
    – MolbOrg
    Jun 7, 2021 at 17:53

Even with transmutation, you better get digging!

How to

  1. Create a new currency. Fix its value to gold. We'll call it USG, for "US-a Great-again" - Trumpus was on the committee and vetoed "US Gold".
  2. Announce that USD will be phased out and retired on a date in the future, USG is now legal tender, and USG dollars are available for purchase at a 1:1 rate. All mint to bank deliveries are now in USG, which is basically the existing money with different faces on it.
  3. Issue US Security bonds at a rate above the market if purchased using USG. Offer to purchase existing bonds in USD and reissue them at a higher rate in USG. Inflation is so low at the moment that this wont be hard. 6.6 Trillion USD in bonds are currently owned by other foreign countries, a small increase in return rate will get those countries purchasing bonds, helping to transition the national debt from USD to USG
  4. Flick a switch and all bank accounts change from USD to USG, and all trade must be in USG.
  5. Announce a reduction in exchange rate coming soon. 10USD now only buys 9 USG.
  6. Keep reducing the exchange rate.

Don't underestimate the timeframes for this. Some of these warnings need to be given 10 years out to avoid panic.

Note you don't have to re-enable "convertibility" to gold. 1 USG represents a small chunk of gold, but the Treasury doesn't have to let you swap it. The USD has been gold-backed at points in its history, but conversion money to gold has been blocked since the 1930s.

You should also do the 1930s thing of banning private gold ownership - all gold must be converted to USG. (I believe this got relaxed in the... 70s? I think. Not sure). You should also force all alchemists to work for you or die in jail, and if any other countries start to research alchemy, make sure to "liberate" them.

Also, you don't have to allow auditors into Fort Knox, you don't really need the alchemists at all, but lets assuming (out of character for Trumpus) that you're being honest and plan to actually make this much gold.

How much

You need to make gold to back the currency. So how much gold do you need to make?
To know that you need to know how many US dollars there are in the world, right?

Physical currency (Or in treasury jargon - M0) + checking accounts (M1) + Savings accounts and money market funds (M2) + Certified Investments (eg Government bonds) (M3) = all the USD in the world.

In this 2006 press release the US federal reserve announced they've stopped tracking the most inclusive definition of this number (the M3 value). Extrapolating from the 2006 figures, you're looking at 1/3rd of all USD is in M3 Certificates of Deposit.

This 2020 press release shows as of July 2020, there was 18.3 trillion USD in existence in the M2 figure. Extrapolating for our hidden M3 value, we're looking at about 27 trillion USD in existence...

... Which is just over the value on https://www.usdebtclock.org/ (26.7 trillion as of this writing). That debt is the other side of investment bonds held by foriegn countries, retirement funds, investments, etc. You can't just zero that debt without destroying everything.

(The US Debt Clock estimates the total currency and credit derivatives as ~700 trillion - but I'm uncertain this is a good choice, derivatives derive from other value, they aren't their own. But it's possible I'm underestimating by a factor of 20 here.)

Gold is currently trading at ~\$2000USD / 0.0311035kg (a "troy ounce". What is it with freedom units?). Thats $64,000 per kg.

Works out to 421 million kg of gold is needed to back the USD.

The world has mined 190 million kg in all history. Your alchemists need to make more gold than has ever been mined.

Assuming they're converting Lead to Gold at 100% efficiency, and can convert 100kg in a 5 minute ritual, it would take over a year for the USA to mine enough lead to cover all the USD, and 120 man-years for the alchemists to convert it to gold.

Gold is now valued at "Cost of Lead" + "Cost of alchemists' time". All those people who bought gold for their retirement fund are now going to starve.

And lead is now surge priced - all the miners are working on overtime, trying to meet the alchemists' demands as well as existing industry.


A gold standard is a way of pegging the value of your currency to the value of something else (gold). We do this sort of thing all the time in non-financial contexts. For instance, the International Bureau of Weights and Measures owns a "prototype meter bar" that serves as the official benchmark for the meter (at least until recently). The definition of "one meter" was defined by rule to be exactly the length of this specific piece of metal. There was one official prototype and the entire metric system was based off of it.

A similar system mapping a currency to the value of some official prototype could indeed work, as that's essentially what the gold standard tries to do. The system that you describe has a really important difference, however. Your universe has alchemists that can alter the supply of gold, thus altering its value. You're attempting to peg your currency to a reference point that isn't constant. It's analogous to defining the meter as the height of that small tree in the park across the street. The tree is going to grow and as it does, the definition of the meter would change and every length ever recorded would have to be re-computed, continuously. The meter wouldn't be a reliable unit of measurement in any sense. You're essentially asking "how can we restore faith in the gold standard, while simultaneously making gold completely unsuitable for use as an economic standard?"

It's not a workable system. If your goal is to keep inflation in check, there are much safer ways to do it. Government can inflate the currency by printing more money, but they can also deflate the currency by removing money from the money supply (i.e., take some of your tax revenue and destroy it instead of spending it). I suppose you could achieve the same effect by having your alchemists transmute some of the gold into something else, but at that point it's just a normal fiat currency that's unnecessarily difficult to manufacture.

  • $\begingroup$ Deflating a currency is never a good idea. It will lead to people investing in money instead of goods, and stuffing it into their mattress. After all, you will be able to buy more for the money next month, so why spend it now? That will effectively grind the economy to a hold. $\endgroup$
    – fishinear
    Sep 5, 2020 at 19:41
  • $\begingroup$ @fishinear if there is inflation then u do the same with gold or other preceous mettals or resources, u take them out of circulation and stuff it. Point in regulation is to keep a balance, and comlexity of that subject brings you all sorts of convinient loopholes, lol $\endgroup$
    – MolbOrg
    Jun 7, 2021 at 18:04

Short Answer:

It would be possible to back the world's money supply with gold without badly disrupting the world's economy. But it would be a big project.

Long Answer:

Step One:

Find an iron nickel asteroid.

Step Two:

Bring the asteroid into orbit around Earth.

Step Three: Cut the asteroid into pieces and bring them down to Earth. Or melt the asterod using tremendous amounts of energy and separate all the elments in it.

Step Four: Separate all the elements in the asteroid. Or bring the separated ingots of single elements down to Earth.

Step Five: Sell the iron separately from the nickel, which should be about 5 to 25 percent of the asteroid, and the cobalt, which should be a smaller percentage. Iron, nickel, and cobalt should make up over 95 percent of the asteroid, and no doubt many other elements are part of the other 5 percent or less, and can also be sold.

The overwhelming bulk of these meteorites consists of the FeNi-alloys kamacite and taenite. Minor minerals, when occurring, often form rounded nodules of troilite or graphite, surrounded by schreibersite and cohenite. Schreibersite and troilite also occur as plate shaped inclusions, which show up on cut surfaces as cm-long and mm-thick lamellae. The troilite plates are called Reichenbach lamellae.9

https://en.wikipedia.org/wiki/Iron_meteorite#Composition 1

Kamacite is an alloy of iron and nickel, which is found on Earth only in meteorites. The proportion iron:nickel is between 90:10 and 95:5; small quantities of other elements, such as cobalt or carbon may also be present.


Taenite (Fe,Ni) is a mineral found naturally on Earth mostly in iron meteorites. It is an alloy of iron and nickel, with nickel proportions of 20% up to 65%.


Troilite is a rare iron sulfide mineral with the simple formula of FeS. It is the iron rich endmember of the pyrrhotite group. Pyrrhotite has the formula Fe(1-x)S (x = 0 to 0.2) which is iron deficient. As troilite lacks the iron deficiency which gives pyrrhotite its characteristic magnetism, troilite is non-magnetic.2


Graphite (/ˈɡræfaɪt/), archaically referred to as plumbago, is a crystalline form of the element carbon with its atoms arranged in a hexagonal structure.


Schreibersite is generally a rare iron nickel phosphide mineral, (Fe,Ni)3P, though common in iron-nickel meteorites. ...In 2007, researchers reported that schreibersite and other meteoric phosphorus bearing minerals may be the ultimate source for the phosphorus that is so important for life on Earth.67


Cohenite is a naturally occurring iron carbide mineral with the chemical structure (Fe, Ni, Co)3


So it seems that iron nickel meteorites and asteroids contain mostly iron, nickel, and cobalt, with sulfur and phosporus. But I suspect that many other elements are also present in iron nickel asteroids, including many heavy metals like lead, platinum, uranium, and gold.

And with an asteroid sized mass, there should be significant amounts of even the rarest elements in the asteroid.

So if an idividual, corporation, organization, or government can sell asteroid material at a profit, they should keep the gold and sell the rest and then:

Step Six:

Repeat many times. Or maybe repeat many, many, many times. Sell the other asteroid materials at a profit and keep the gold, adding it to an ever larger stockpile.

Step Seven: When the gold stockpile is large enough, issue money backed by the gold standard, enough money to run the entire world economy.

The gross world product (GWP) is the combined gross national income of all the countries in the world. Because imports and exports balance exactly when considering the whole world, this also equals the total global gross domestic product (GDP).[nb 1] According to the World Bank, the 2013 nominal GWP was approximately US$ 75.59 trillion.[1] In 2017, according to the CIA's World Factbook, the GWP was around US $80.27 trillion in nominal terms and totaled approximately 127.8 trillion international dollars in terms of purchasing power parity (PPP).2 The per capita PPP GWP in 2017 was approximately Int$17,500 according to the World Factbook.2


The World Gold Council estimates that all the gold ever mined totaled 190,040 metric tons in 20191 but other independent estimates vary by as much as 20%.2 At a price of US$1,250 per troy ounce ($40 per gram), reached on 16 August 2017, one metric ton of gold has a value of approximately $64.3 million. The total value of all gold ever mined would exceed $7.5 trillion at that valuation and using WGC 2017 estimates.[note 1]


So the gold reserves of the world, at their present market value, have less than 10 percent of the total value of the world's economic activity in one year. In order for all money to be backed by gold without a drastic change in the value of gold, causing various kinds of economic disruption, the gold supply has to increase by at least 10 times. But of course increasing the gold supply by 10 times would tend to decrease the fair market value of gold, so more gold would have to be supplied to make up for the lower value of gold, and so the value of godl would fall more, requiring more gold to be added to make up for the decreasing value of gold, and so on.

So at least 1,900,400 metric tons of gold would be needed to back the world's money supply with gold without drastic economic disruptions.

I'm feeling too lazy to estimate or calculate how many cubic kilometers of iron nickel asteroid material would have to be brought to Earth in order to back the world's money supply with gold. But that should be an interesting calculation for someone.


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