Will gold become plentiful?

Eight weeks ago, my column in the Numismatic News/NumisMaster e-newsletter discussed how future nanotechnology capability could make it possible to counterfeit coins that would be indistinguishable from the originals even if analyzed at the atomic level. (Read the article here.)

There is one other consideration relevant to collectors and investors in precious metals. If it becomes possible to create perfect counterfeits, part of the technology to achieve this would be the ability to transmute elements. In other words, future science may make it possible to convert one element into another by artificial means – and do so at a low enough cost to alter the human economic world.

In ancient history, alchemists sought ways to change other elements into gold or other precious things. They were not successful. Under some processes available today, including nuclear reactions and radioactive decay, it is possible to shorten the half-lives of radioactive material.

The first accidental achievement of turning lead into gold probably occurred in 1972 in the Soviet Union. The first deliberate transmutation of lead into gold occurred under the direction of Nobel Chemistry Laureate Glen Seaborg in the United States in 1980.

On the day when advancing technology, especially nanotechnology, is able to transmute and fabricate any and all materials on demand at low cost, there will no longer be any precious metals or rare earths. In other words, physical gold, silver, platinum and palladium will no longer be prized valuable possessions.

While I have a high degree of confidence that advances in nanotechnology will eventually bring about material abundance, my best guess is that only a small percentage of humans alive today will live long enough to see that future. So, I continue to recommend holding a portion of one’s assets in physical gold and silver as insurance against calamities that may hurt the value of paper assets such as stocks, bonds and currencies.

If transmutation eventually makes any physical material of little value, what is it that might serve as a very long term (thinking in terms of centuries) asset to hold? I personally don’t have the answer to this possible dilemma. However, I recently enjoyed the book “The Unincorporated Man,” authored by brothers Dani Kollin and Eytan Kollin, which has an interesting possible (and funny) answer to this question.

Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).