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I really like the analogy but Smaugs' gold might track inflation if lucky whereas cash carries inflation risk. A nice problem to have in the realm of "first wo
by jonbarker 10y ago
I really like the analogy but Smaugs' gold might track inflation if lucky whereas cash carries inflation risk. A nice problem to have in the realm of "first world problems" for sure but still a problem. Also, if the companies had good enough perceived growth opportunities they would be investing instead of carrying hoardes of cash.
- WalterBright 10y agoA more or less real world experiment with Smaug's gold happened when the Spanish exploited S. America for gold and silver, shipping it back to Spain. https://en.wikipedia.org/wiki/Spanish_Price_Revolution https://en.wikipedia.org/wiki/Spanish_Price_Revolution The inference I draw is that prosperity does not stem from adding large quantities of money (gold) to the economy; what happens instead is disruption.