1038: Gold | Skeptical Sunday

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1:38Welcome to Skeptical Sunday. I'm your host, Jordan Harbinger. Today, I'm here with Skeptical Sunday co-host Michael Regilio. On the Jordan Harbinger Show, we decode the stories, secrets, and skills of the world's most fascinating people and turn their wisdom into practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker. During the week, we have long form conversations with a variety of amazing folks from spies to CEOs, athletes, authors, thinkers, and performers. On Sundays, though, we do Skeptical Sunday where a rotating guest co-host and I break down a topic you may have never thought about and debunk common misconceptions.

2:14Topics such as why the Olympics are kind of a sham, why tipping makes no sense, acupuncture, astrology, hypnosis, internet porn, and more. And if you're new to the show or you're looking for a handy way to tell your friends about it, I suggest our episode starter packs. These are collections of our favorite episodes on persuasion, negotiation, psychology, disinformation, cyber warfare, crime and cults, and more. That'll help new listeners get a taste of everything we do here on the show. Just visit jordanharbinger.com slash start or search for us in your Spotify app to get started. All right, so we've all seen and heard commercials selling gold.

2:45They're different from other advertisements. Gold doesn't process your food. It doesn't water your lawn. It doesn't lower your cholesterol. Gold is just gold. So how did a metal that we find at the bottom of rivers and embedded deep in the earth become the original basis for money? How did number 79 on the periodic table of elements become the literal gold standard? Is it really better than government-issued currency? Should everybody have a little gold stashed away in case of emergency? Well, today, comedian Michael Regilio is here to shine a light on and maybe take a little shine off of gold.

3:19And okay, I promise I'm only doing this once on this episode. I love gold. Nice. And as my Italian uncle would say, AU, we're talking about gold over here. Okay. Yeah. At first, I get it, right? Because AU is the abbreviation for gold in the periodic table. But I don't think that anybody who talks like that knows that AU is the abbreviation for gold on the periodic table, or possibly even knows what the periodic table actually is. Yeah. In fact, I would say my Italian uncle probably thinks the periodic table is a liberal conspiracy or something. So you got me on that one. Yeah. Look, let me ask you something, Jordan.

4:00Well, what was your first awareness of gold? Well, we didn't have much gold in the house growing up. So I'm guessing it's going to be watching the Olympics and seeing people win gold medals and kind of wondering what those things were. Yeah, me too. In fact, ever since I watched the Olympics for the first time, I really wanted a gold medal. But they never made watching the Olympics an Olympic sport, so... Yeah, that must have been an oversight. I'm sure. And having watched the Olympics, I know the athletes don't want to win the gold medal to trade it or sell it. They want to hang on to it. Like, forever.

4:36Unlike those garbage bronze medals that get immediately recycled, no doubt. Bronze, come on. Why bother? Look, we humans have like this innate attraction to gold. We want to hold onto it. In fact, people have hoarded gold for centuries. Now, before we get angry emails, I do have a few friends who've won bronze medals. They're amazing people. They're amazing athletes. I could never compete with them. Calm down. But anyway, is that for real? People just hide gold away? It sounds very pirate-y to do that. Yeah, yeah, they do. In fact, this has been a problem for the gold market ever since the beginning of the gold market.

5:13getting the gold out from under the mattress and into the marketplace. Way back in the Middle Ages, it was called the bullion famine. People hoarded so much gold that it was hugely problematic for the economy. Hoarding gold affected their economy? And not just theirs. In fact, to address the problem of gold hoarding in modern times, President Roosevelt issued Executive Order 6102. Ooh, sounds serious. Yes. I'm not sure I've heard of that one or any executive order for that matter. Well, it's serious, all right. On April 5th, 1933, Franklin Delano Roosevelt enacted an order forbidding the hoarding of gold.

5:56Americans were required to turn in their gold to the U.S. government for the market price. Roosevelt wanted to remove constraints from the Federal Reserve and print more money. And since the dollar was backed by gold, he needed to increase the amount of gold held by the government. So even though these limitations on gold were lifted in 1974, this executive order still reverberates today, as we'll see when we get into those commercials for gold you just mentioned. So in 1933, America's dealing with the Great Depression. So I think, yeah, it makes sense the government would want to print more money to try to get out of that.

6:33Yeah, exactly. And all that gold stuffed under the mattresses wasn't doing the economy any good. That gold needed to get out there and do its thing. Okay, but besides being valuable, what does gold actually do? I mean, the whole opening was like, it doesn't water your lawn. It doesn't lower your cholesterol. It just kind of sits there, right? It's funny you should say that because actually throughout history, that was in fact true. But in the modern age, gold has kind of found some practical uses. Gold, as I'm sure you know, it's in all of our modern electronics. In fact, your smartphone has 0.034 grams of gold in it.

7:12Ah, that must be why they're so expensive. Not really, because that's about two bucks worth of gold. Yeah, but you know Apple charges us like$78 for that gold. Yeah, and here's the thing, though. In two years, your iPhone is going to be next to worthless when Apple releases the iPhone cube or the iPhone sphere or whatever. Meanwhile, the gold will still be worth two bucks or more. Gold is unique and useful in ways our ancestors who hoarded it could have never known. How so? Several ways. Because it's not allergenic, gold is used in dentistry. We use gold compounds for arthritis and other conditions.

7:51And it is an incredibly efficient conductor of electricity. It's mostly corrosion proof. Gold is malleable and practically indestructible. That's why NASA and other space agencies use gold for all the spacecraft and satellites they blast off the planet. So we're just blasting gold into space? Yep. You might say it's returning home. That's right. I've heard Neil deGrasse Tyson talk about how gold is forged in the stars. Right. Gold comes from neutron stars and supernovae. And by the way, I originally wrote supernovas and I was autocorrected to supernovae. So how erudite and pedantic am I? I say supernovae now.

8:36It does sound a little pretentious to say supernovae, but you know, if it's right, then it's right. So here we are. Well, look, you could say it comes from this hearts of stars, but what it actually comes from is the violent deaths of those stars. Because deep in the core of these stars, all the elements that are heavier than hydrogen and helium are made. And when these chemical factories that are stars explode, they shower the universe in gold. Ah, golden showers, literally. You had to go there. But it's true. That's why gold is everywhere. What do you mean everywhere? Isn't it super rare? I mean, rare is a relative term, but let's put it this way.

9:17In the earth, like way down in the earth, Down in the molten core where humans can't get at it, there is about 1.6 quadrillion. Wow. Quadrillion. Talk about fun words to say. That's even more fun than supernovae. 1.6 quadrillion tons of it in the Earth's core. So much so that you could cover all the land on Earth in 20 inches of gold. That sounds slippery, first of all. Just imagine all the land on Earth looking like Donald Trump's bathroom. there's also about 20 million tons of dissolved gold in the oceans. Look, I don't know about you, but those huge amounts of gold kind of scare me. Why would that scare you?

10:04It has to do with an unpleasant experience I had with a Mr. T doll. Look, I don't want to talk about it. Okay. Yeah. Wow. Me neither, actually. Great. So despite these inaccessible giant amounts, Only a small amount is forced up in fissures where it can be mined. But it's not so easy to mine anywhere. Most of the gold in the rivers and other easily accessible places, that's all gone. It's much more complicated to get gold now. Gold mines are the deepest mines in the world. The deepest is in South Africa, and it's 2.5 miles below the earth. Wow, 2.5 miles. That's a big old hole. No other substance in human history drives people to such extremes.

10:46I mean, man dug out literally miles for a bunch of gold. That is wild to think about. Yeah, I know. Look, if I told you there was an original Star Wars figure 2.5 miles below your feet, you'd be like, and there it shall remain. But when it's gold, people are like, get a freaking pickaxe and let's go. I guess there's nothing else like it. And when you get down into the mine, by the way, it's not just there for the taking. It takes 140 ,000 kilos of rock and ore just to produce one kilo of gold. I see. So that's what makes it rare, which makes it valuable. Yes. And all the gold ever mined, by the way, would only fill three Olympic swimming pools.

11:28I'm not great at converting measurements into Olympic swimming pools. I mean, we're Americans. We don't use the metric system unless it's guns or drugs. But maybe since you're the Olympic expert, you can tell us how much that is. Yeah, it is about 244 ,000 metric tons of gold that have been mined ever. Ever? In human history? Yeah, in all the history of the world, ever. And get this, almost all the gold ever produced is still around. Wow, I guess it, I mean, that makes it sound indestructible after all. Yeah, unlike that Mr. T-Doll. Now, maybe I do want to hear that story. Not a chance. In fact, I'm taking that story to the grave.

12:10Interestingly, though, that's where many people used to take gold. To the grave. The ancient Egyptians, for assistance, thought gold came from the sun and was the flesh of gods. Flesh of gods being one very badass heavy metal band name. Yes. The irony, of course, being that gold is not considered a heavy metal. In ancient Egypt, to own a lot of gold showed how powerful and close to the gods you were. Not much has changed. People always flash in their bling. Right. And the Egyptians' presumption about the immortality of gold, they were kind of right. Gold is kind of godly. The bling dug up today with the pharaohs is as shiny today as the day it was buried.

12:53Like we mentioned, it doesn't rust or corrode. The Egyptians buried lots of it. They completely encased the pharaohs in a golden sarcophagus before burial as a sort of craft into the afterlife. I guess man has been making gold spaceships all along. Hey, maybe they got the idea from the aliens that built the pyramids. You know what's as good as gold? The fine products and services that support this show. We'll be right back. Thank you for listening to and supporting this podcast. Your support of our sponsors keeps the lights on around here. all the deals, discount codes, and ways to support the show are all in one place, jordanharbinger.com slash deals.

13:32You can also ask the AI chatbot on the website. You can even email me. It is that important. I would happily surface those codes for you. It's that important that you use these to support the show. And thank you for supporting those who support us. Now, back to Skeptical Sunday. It was by the decree of King Croesus of the ancient country of Lydia that we We minted our first gold coins ever made, and that was around 550 BC. Lydia, by the way, is part of modern-day Turkey. The Egyptians soon followed suit and minted the first great currency, accepted and revered around the ancient world, the shekel.

14:07So I've heard of the shekel, but people who talk about shekels are either playing Dungeons & Dragons or they're rapping. In other words, it's people just being super chill and cool or people that are rapping. Least hip person ever.

14:50the Money of the Middle East. Oh, okay. The Money of the Middle East is a pretty good rapper name, though. Yes, I agree. At around 50 BC, the Romans minted their first gold coin called the Arius. And I looked it up, by the way, on eBay. You can still get an Arius for around$19 ,000. Hmm. And why would I want one? Because, Jordan, that's how you get into underground gladiator fights. Haven't you ever been to Italy? Well, only for overrated pizza and the occasional heist, but that's about it. Yeah, okay. Well, in 1284 came the Italian coin, the ducat. Oh, yeah. Public enemy has a line. I don't wear gold, but I clock ducats.

15:33Or was it, is it Ducat or ducat? I've always heard ducat. I did do the dictionary.com and found two of the three dictionaries pronounce it ducat and one pronounces it Ducat. Fair. Okay. What does it matter how it's pronounced? It is in a lot of lyrics. The ducat, as I'm guessing it was pronounced, was an incredibly popular coin, regardless of how you want to pronounce it. Why was it so popular? It was popular because it was stable. And it was stable because it was made from a set amount of gold. It was about 3.5 grams of solid gold. So by always being a specific set amount of gold, people could, I guess, feel secure in what they were getting?

16:18Well, that was the idea, but actually it wasn't a very stable size at all because of clipping and the clippers. That was messing the whole thing up. Why were the clippers a problem? Their record looks pretty average this season. Wrong clippers, Jordan. And technically, it wasn't the clippers. It was the clippings that were the problem. Clippers were just that. They were people who would clip gold coins and collect and melt down the clippings. It was actually a pretty sweet gig if you were just a little dishonest, which I guess everyone was back then because those gold coins were constantly shrinking.

16:59Ah, the first gold scam. Since gold is a very soft metal, I'd imagine it's pretty easy to clip. Yeah. And when you see really old coins, they're like really messy around the edges. Is that why? Clippers? Well, actually, no. They started off a little rough around the edges, kind of like this podcast, from the production process at the Mint, which made clipping the edges so easy, which made clipping the scourge of banks and governments. The damage to the integrity of coins was actually pretty serious. So much so that in the 1700s, the British government tasked none other than Sir Isaac Newton to take on stopping the Clippers.

17:45Wait, what? I haven't heard the story of Newton. The dude has one impressive resume. Yeah, he was an intense dude. Side note, but my favorite Isaac Newton story is when he was studying color and light and he wanted to see how he would perceive light differently if he poked his eye with a pin. So he did. That guy was curious as hell and possibly a little bit insane. Right. And Newton was obsessed with stopping the Clippers. He even had spies out in the population looking for Clippers. Spies. Wow. Wow. And to think this whole time, I thought he was just the apples and gravity guy. Look, old pin in the eye Newton set out to foil the clippers as the new master of the mint.

18:31And he saw the coin edges that we already discussed as the cause of and solution to the clipping problem. Newton created a coin with a defined printed edge. So if someone took a chunk out of it, it'd be obvious. It seems like it should have been obvious to make that a thing before. Right. And once Newton reinvented the coin, Britain had a, quote, re-coinage. All the coins were recalled and replaced, and Britain's currency became stable. So you could then trust how much your coins were actually worth, which I guess that seems logical. What an expensive mistake that must have been. Yeah. You know, we talk about the stability of gold.

19:13I think it's worth noting, and this is just me here, that I think there's something primal at play with the stability of gold. Like we as humans, we see it. We want it. We yearn for it. We know that people will always want it. It is our precious. So it's reasonable to assume that it will always be valuable. Well, to be fair, the precious in Lord of the Rings, that's not a good thing. It drives people crazy. Smeagol was like a normal guy and then he was that little goblin guy because of the ring. Yeah, and guess what? So does gold. It would be impossible to tell the story of gold without telling the story of greed.

19:50As poet John Ruskin asked, do we have gold or does gold have us? Okay, I don't know John Ruskin, but that line kind of sucks. It sounds like something a 14-year-old trying his first joint stolen from his uncle's glove compartment thinks is deep, bruh. Okay, fine. I only used it to illustrate that the human want of gold is insane. People do baffling things for gold. It's like the hot girl at middle school and dudes just turn into dumbasses around her. It's like a lost city of gold through the dense disease and snake riddled jungle. Yeah, okay. Get me a machete. Let's go. I guess gold does to men what boobs do to boys.

20:36Are you referring to the legend of El Dorado and the Spanish conquistadors and all that? Yeah, I am. But just as an example of gold fever or gold sickness or greed or whatever it is, there are plenty of examples of the destruction, madness and burning want of gold. The Spanish are just one. The conquest and destruction of the peoples of the new world is in many ways a result of the human want of gold. It's always captivated men, much like this podcast. It was actually the writings of Marco Polo who talked of Chinese and Japanese gold that inspired Christopher Columbus. And that's what Columbus was trying to do.

21:18I did not know this, to get to Japan for the Japanese gold. Wait, what? He was going to Japan? How am I just learning this? I had no idea about any of this. Well, I looked into it. He ultimately wanted to get to India, but he thought he'd just do a quick stopover in Japan, pick up some gold, and then use it to buy some spice in India. That is a hell of an errand list. I had not heard of that whole stopover in Japan fact before, but he ends up in the New World. Well, wherever he ended up, he was going to look for gold. Columbus was crazy for the stuff. In fact, Columbus's diaries mentioned gold 65 times.

21:56He definitely had his money on his mind. Him and his trusty sidekick, money of the Middle East. And they all did. That's the fact. All the explorers that followed had gold on their minds. Pizarro took the quest for gold to new extremes. He made the trek into the unknown looking for El Dorado, the city of gold you just brought up. It seems so ridiculous now believing in an entire city made out of gold. Right. Not to mention, if you're like a conquistador in the gold game and you found an entire city made of gold, wouldn't that like flood the market and crash the price of gold? Maybe this is where that innate human want of gold thing comes in.

22:39Maybe you just sell it bit by bit like crypto scammers are doing now in the modern era. Which reminds me, if anybody wants to buy some Dogecoin, hit a brother up. The sad thing is, despite all the pain and suffering caused by the Spanish quest for gold in the new world, the gold plundered by the Spanish was squandered. Spain failed to become the economic powerhouse they had hoped to be. They built some nice buildings with the money, but for the most part, they just burned through it. They were like a lottery winner who blows it all on leopard print leather couches and caviar. Yeah, only they didn't want caviar.

23:14They wanted spice. Europeans wanted spice and they traded gold for it. Most of the spice trade was with the East. The Europeans paid for spice and gold and the East kept the gold. It's also crazy to think about how crazy the Europeans were for spice. Yeah. Empires rose and fell on spice. If you've ever had British food, by the way, you'll know that that spice was very needed. Yeah, I need a time machine and 100 pounds of Cheeto dust and I'll control the world. It'll be brilliant. Speaking of brilliant, let's add one more notch to Isaac Newton's accomplishments. Newton, as master of the mint, is also credited with devising the gold standard.

23:59And this gold standard was adopted by the global economy. So, damn, he was accomplished. I'm wondering if I should maybe poke myself in the eye as well. Do not poke yourself in the eye. No one poke themselves in the eye. Okay, fine. But as weird as it is to say, I am really impressed with Sir Isaac Newton right now. Yeah. Devising the gold standard, revolutionizing science, inventing calculus. To be honest, I see a little bit of me in Isaac Newton. Oh, yeah. Oh, sure. We all do, I'm sure. But can you clearly define what the gold standard is exactly? Well, the roots of it go back to the weight of gold.

24:42Gold traders were getting lower back problems, and transporting it left them vulnerable to attacks from thieves. Yeah, it sounds kind of like leaving a casino in Jersey City. Exactly. So merchants began using bills of exchange. That is to say, paper notes that represented actual physical gold being kept somewhere. But people had to trust that that piece of paper represented an actual amount of gold. These notes had to be backed by reputable banks and merchants. So like money. Yes. And now, the reputable bank or merchant was the government. So with each paper note being a receipt for physical gold, the world's money stabilized.

25:24We tied it to the price of gold. Is it true that you could go to a bank and exchange paper money for gold? Yes. Back in the day, you could really do that. This ended, though, with FDR's executive order in 1933. But yes, at one time, you could exchange dollars for gold. But why? The whole point of paper money was that you could trust that the gold was there. You didn't need the gold. Funny, there was an executive order demanding people turn in their gold so they could print money, but then you could take your money to the bank and demand that they give you your gold. Right. That's exactly why FDR, I mean, technically he suspended the gold standard in 33.

26:05The U.S. dollar was still backed up by gold, but he ended that practice. You could no longer just go turn in your gold because people during the Depression were getting nervous that their money wasn't going to be worth anything, but that gold would be. So more people were turning in their dollars for gold than were just hanging on to their dollars and FDR in order to get the economy going said, you've got to turn in your gold. Right. It sounds a little sus, right? It's kind of like, oh, I'd like to see the gold that backs up this money. Actually, we're changing the rules and you can no longer do that.