> they don't simply act like Smaug and sit on a pile of gold coins
That's because a pile of gold coins does not make money. One makes money by investing the coins, not investing in coins.
I always thought Smaug's hoard (as depicted in Jackson's movie) was beyond ridiculous. If it was unleashed on the economy, the price of gold would drop to the point you could pave the roads with it and make sewer pipes out of it.
Middle Earth was supposed to be huge, massive, so I wonder if spread evenly that would be so. And I wonder, comparatively, how that hoard would look compared to 10 year's output of any Dwarf gold mine.
Maybe gold was already cheap. Maybe a gold coin was as silver to you and I.
I think I'll have Claude do a deep dive and research into this report, then release a paper on it.
(This goes under the theory of 'the more capacity you have, the more capacity is used' concept, and so, within a few years, we'll have 100 page reports on musings like this, instead of a two or three line post)
Gold, silver, copper, iron were all commonly mined by Dwarves for sure. Mithril, of course, is what made Moria so immensely wealthy so there was at least one thing more valuable than gold.
As an aside, I know it's mentioned once or twice that Dwarves ascribe the monetary value of gold/gems because of an appreciation for it's beauty and not its rarity...but I don't think Tolkien gets into the nitty gritty of that too much.
That's because a pile of gold coins does not make money. One makes money by investing the coins, not investing in coins.
I always thought Smaug's hoard (as depicted in Jackson's movie) was beyond ridiculous. If it was unleashed on the economy, the price of gold would drop to the point you could pave the roads with it and make sewer pipes out of it.