New shows, new music, new movies, keeping up with pop culture sometimes feels like a full-time job. Thankfully, over at Pop Culture Happy Hour, it's literally our job. We break down what's actually worth watching, listening to, and pretending you already knew about. So the next time someone says, did you see that?
You can say, yeah, obviously. Follow NPR's Pop Culture Happy Hour wherever you get your podcasts. This is Pana Money from NPR. In the last couple of months, the price of gold has gone way up.
It hit a new high last month, just over $2,400 per troy ounce. Now, gold has had a kind of shiny quality to it for thousands of years, both literally and in the marketplace. It was once used as currency, think gold coins. And even once we went to paper, a lot of currencies around the world were still backed by gold.
This is the gold standard. And even though we are no longer on the gold standard in the United States, gold is still special. Hello and welcome to Planet Money. I'm Sally Helm.
Today, we're going back in the Planet Money Time Machine to an episode where we try to understand how with all the elements, why gold? What is it about gold that makes people value it so highly? After the break, our colleagues Jacob Holstein and David Kastenbaum will go through the entire periodic table of elements to figure out which element would make the best money. Does it have to be gold?
Because to me, osmium seems like a logical choice. I'm rooting for osmium, the densest element. You know, David, I'm no scientist, but for some reason, I really got my heart set on lithium. Dude, that is not going to end well.
There's this quote that I really love, widely attributed to Warren Buffett. The quote is, gold gets dug out of the ground in Africa or someplace, then we melt it down, we dig another hole, we bury it again, and we pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.
Now, that's a little bit of an overstatement. Gold does have a few practical uses. I mean, people like it for jewelry. Occasionally, it's still used for dental fillings.
And it has these uses in electronics, cell phones. It's a good conductor. But still, a lot of the gold in the world is owned by people who aren't doing anything with it. It's just sitting there.
And the question I had, I mean, before I was a journalist, I was a physicist, right? The question I had is, why gold? I mean, it's just this metal, right? We've got 118 elements in the periodic table.
It's just an atom. It's got 79 protons. That's what makes it gold. But, you know, you add one more proton, you've got mercury.
You add one more, you've got thallium. Is there really anything that's special about it? Or something so special that it deserves to be the thing that humans have valued for so long? So, today, we're going to go through the entire periodic table of elements.
For those of you who haven't seen a periodic table since 10th grade chemistry class, it looks kind of like a bingo card. It's this grid with a bunch of squares. Each square has an element in it, that type of atom. There's a box for each element that exists.
It went for hydrogen and carbon, et cetera. And it's organized into columns. And the elements in each column have some similar properties. And so, today, we're basically going to play periodic table bingo.
We're going to take the whole table and just try and start crossing stuff off. You're welcome to play along at home. You know, go print out your periodic table and take out a big red pen or something. So, we printed out our own copies and we went to visit Sanat Kumar.
He is chair of chemical engineering at Columbia University. And the first thing you notice about him are his glasses. Bingo on the top, regular 1950s style plastic frames, plastic lenses. These are dynamite glasses.
He bought them in Soho. And he looks like a million bucks. And he's like the hippest chemistry professor who I've ever seen. So, Sanat is perfect for this because he has a chemist's perspective.
But he also comes from a place where gold really does have this special status. His grandfather, who lived in the south of India, was fairly well off. Had a big house, a big family. And he owned a lot of gold.
Growing up, my grandfather had a gold strap who would work in the back of the house. There were two of them. And they had this little bowl in which there was husk. And they would put a little bit of coal in the middle.
And those nice little crucibles, they would melt coal and pour it. And it was fascinating to watch that. They had these wonderful balances that I wish I had kept because there's these really old-fashioned balances that would go down to a milligram. And what was the finished product?
What were they making? Jewelery. More jewelry and even more jewelry. You understand the concept of dowries and stuff like that.
So, if you have seven daughters, you've got some dowry to take care of. So, in India, gold really is a kind of currency. It was when you're going up with this now. It's more than a currency.
It's how you measure. I mean, people talk about putting currency into your pillows and your mattress, right? This was our analog of doing that. You buy gold and you have these big safes and you store them.
It was easier to store than putting money into a mattress. Because money didn't mean a whole lot. It would burn. Gold wouldn't burn.
So, they love gold. Jacob, you know what I say to that? Yeah, so it doesn't burn. Mine doesn't burn either.
Okay, so let's get to the bingo then, right? So, we're there with Sonata and we pull out the periodic table of the elements. And we start with the column on the far right. The elements in this column have a really appealing characteristic.
They're not going to change. They're chemically stable. Helium, Neon, Argon, Krypton, Xenon, Radon. Those are the noble gases.
Correct. So, they're good in a way because they're non-reactive. They're not going to change. Big drawback, a gas.
Have your money in a jar, but if you open the jar, you'll be broke. I mean, helium is one of those things that will actually leak away. People actually calculated that if you make a metallic container and left it out there, helium will diffuse through the container and go away. Because the atom's so small.
It's so small and it's got very special quantum properties. For some reason, it's just like, they would rush through metal. So, you couldn't even leave it sealed in a container. I mean, that's just bad news all the way around.
So, I'm feeling like super safe about my helium money. Don't worry about it. I got it sealed in a metal box with a quantum mechanics and that means I'm broke. Basically, yeah.
All right. So, if you're playing at home, you can cross out the rightmost column, helium, down through radon. Okay. So, rightmost column, gone.
Now, let's jump over to the leftmost column. It's called group 1A. Hydrogen is on top. That's a gas.
You can cross that out right away. Below that is my pick, lithium and sodium. I don't know how many of you played with. Sodium, for example, is extremely flammable.
That would be bad for currency. That would be very bad. As you go down the table, it becomes more metallic. But they still are very reactive.
So, you can start ruling out group 1A, for example, as being the most reactive. And why don't we want a currency to be reactive? Obviously, exploding is bad. Well, lithium is, for example, known very well.
You have lithium ion batteries. And if you expose lithium through air, it will cause a huge fire. They can burn through concrete walls. So, I had a colleague of mine who works on new batteries.
And he had a lithium leak and he burnt its way through three feet of concrete wall. So, that created a few problems. I don't think you want a currency to be sort of doing that in your pocket. All right.
So, I'll give up on my dream of a lithium standard. But when Sinat says reactive, he doesn't always mean it's going to blow up or make a hole in a concrete wall. Sometimes it will just kind of corrode. And that's one nice thing about gold is that it stays gold.
I mean, you'd think you've got gold coins sitting on the bottom of the ocean. They're going to corrode or get all messed up. But you can find them hundreds of years later, brush them off, and they're unchanged. Nice, shiny gold after centuries on the ocean floor.
And it turns out this is a pretty rare quality of elements on the periodic table. So, Sinat really gets the momentum going now. He starts crossing off a lot of stuff. Because it turns out that most of the elements on the periodic table are pretty reactive.
They like to bond with each other or, you know, some kind of chemical reaction happens when they're around each other. So, Sinat crosses out the left-hand column and the next one and the next one and five more columns on the right. I ask him then about these two weird rows at the bottom. They're always kind of broken out separately from the main table.
And the elements there have some awesome names like Prometheum, Einsteinium, Kestenbaumium. You wish. There's no Kestenbaumium. Nice try, though.
Nice try. You almost got a pathway. These are referred to as the lanthanides and actinides. And many of them, for example, the actinides are all radioactive.
So, these are, again, things that would not make a very good coin because you'd come back a half a second later and it would have half decayed. You'd come back a year later and 2% of it would be gone or something. Maybe more than that, but in the process you'd be dead as well. Okay.
Now you can answer. We can cross this off. Okay. So, we've eliminated the columns on the left side and we've gotten rid of the columns on the right side.
And now we've crossed out those rows on the bottom. I feel like we're converging in this kind of sweet spot at the center of the periodic table. And all by now, if you're following along at home, we've crossed off 78 elements. We've still got four of you left.
So, to summarize our criteria this far, if you want something to serve as money, One, it should not be a gas. Two, it shouldn't be very reactive. It shouldn't burst in flames or corrode. Three, it should not disappear through radioactive decay.
Also, four, it should not kill you if you hold it in your pocket. All right. And now, so that gives us a new requirement, a number five. You want the thing you pick to be rare.
And here again, there's this very elegant way the periodic table is set up that can help us. As a rule of thumb, rarer elements tend to be more toward the bottom of the table. And that, weirdly, is because of stars and supernovas. Turns out all the elements in the periodic table, pretty much, are forged in stars or stellar explosions.
And it gets very hard to make heavier elements because you basically got to stick together a bunch of light stuff. So there are fewer of the heavier elements out there in nature. So this gives rid of a bunch of the light stuff toward the top of the periodic table. Like, say, silicon, which is the key ingredient in sand.
Silicon is the most common thing on Earth. I think carbon, maybe it's even more than carbon. I think silicon and iron are probably the two most ubiquitous things on Earth. So that makes it have almost no value.
I could go to the beach, pick up a bunch of sand. It would be as rich as anyone else. It would be like hyperinflation, right? Like, suddenly, wait, I got all this sand.
That was not worth anything. I think in the end, that's one reason, but it's also the reactivity that would come back to play. Another element that's too abundant is copper. It sounds promising.
We make coins out of it. But there's this great backstory here. Sweden, it turns out, has a lot of copper. And back in the 1600s and 1700s, they decided they'd use it as money.
But because copper was so abundant, they had to make their coins really big. There's actually one coin worth 10 dailers, whatever that means. It weighed 43 pounds. So I'm going to just knock these set of things out.
Titanium, vanadium, cronium, manganese, iron, cobalt, nickel, copper, zinc. Now, we're looking for an element that's rare, but we don't want it to be too rare. And unfortunately, that is why my favorite, osmium, a nice blue gray metal, the densest of all the elements, osmium get the axe. Osmium is probably one of the rarest things around.
Why? I have no clue. It apparently comes in with meteorites. Osmium and iridium are found in meteorite rock.
And so you can find them, but they're very, very hard to find and very hard to mine for that reason. So we have shed a tear for osmium, and we are down to just five elements. The final five. Why does gold win out, and why do its competitors end up on the monetary scrap heap?
Also, David and Jacob try to figure out whether this little gold coin they bought is legit. That's after the break. Darian Woods here. As the U.S.
federal debt grows, so too does the interest on it. And this year, it hit a milestone. Interest payments this year will actually be larger than national defense spending for the first time. And that's not a small number.
That is one of the largest items in the entire federal budget. That's from our latest bonus episode. It's my conversation with a long-time debt hawk about the potential risks to the economy and when spending makes sense. You can check that out now if you're a Planet Money Plus listener.
If that's you, thanks for your support. If it's not, it could be. You get bonus content, sponsor-free listening, and support the work of Planet Money. Go to plus.npr.org.
Ladies and gentlemen, our final contestants are... Rhodium, palladium, silver, platinum, and gold. And David, this is really impressive, because Sinat is just based on chemical reasoning and the structure of the periodic table. He's ended up with a list of what actually are precious metals.
They're rare, they're stable, they don't react, and they're all expensive. Rhodium sells for more than $2,000 an ounce. So from this point forward, though, things get a little tougher. So silver, which is on the list, has been used as money, but Sinat throws it out because, he says, it tarnishes.
Now, you can polish it off, but the tarnish has silver in it, so when you polish it, you're actually losing some silver. It's not the best choice, so we throw silver out. The way I think about it is that rhodium, palladium, platinum, and gold are four choices you would come down to. Take that, gold.
You thought you're special? You're not that special. I mean, I'm imagining some parallel universe now where the U.S. had fights about whether we should go off the rhodium standard or where medieval kings had chests of palladium in their fight wars over.
I like the idea of medieval kings and chests of palladium. There are a couple sort of historical problems here. A big one is that palladium and rhodium weren't even discovered until the early 1800s. Yeah, that's fine, but that still leaves you with platinum and gold.
And platinum turns up in streams just like gold, so it could have been platinum. It could have been platinum, but say you're in, you know, ancient Egypt or whatever, you want to make your platinum coins, you're going to need some kind of magical furnace from the future. Can we look at what's the melting point of platinum? We can certainly look at its high.
Melting point of platinum is 1772 degrees centigrade. Yeah, Jacob, that's over 3,000 degrees Fahrenheit. In fact, we visited this guy in the jewelry district who told us that melting platinum is a real pain. You have to use this special crucible, which you can only use once, and it's really expensive.
Gold, it turns out, is much easier to melt into bars and coins just by chance. It melts at a much lower temperature that you can get just by burning coal. And one other pretty compelling historical argument here for picking gold over platinum. One thing you want for your element that's going to serve as money, you want to be able to test it.
So if someone says, hey, trust me, this is money, you want to know you're not getting ripped off. Platinum looks like a lot of other stuff. It's kind of silvery in color, and gold really looks special. It looks like gold.
And it turns out gold is something that's actually pretty easy to test. This is something we went and saw with our own eyes. We went back to visit Hank Mendelsohn in the New York jewelry district with our coin, and I said, how do we know this isn't a fake? You sold it to us.
I want you to test it. And he did this really simple test. He took out a black stone and some sort of pumice. This is what we do.
What you hear there is Hank taking our coin and scraping the edge against the stone, and it leaves this gold smudge. And then he goes fishing around in his desk drawer. You have a drawer in your desk, and you're kind of my desk. He's all these bottles with clear liquid.
What are all these different liquids in the bottles? It's some form of acid. So here, this is 22 carats. So let's see what happens here.
So what he's got is this little bottle. It's a particular strength of acid that he can use to test to see if the gold has a purity of 22 carats. And he puts a drop of it on the stone where he scratched our coin, and the smudge stays there. So that means our coin is 22 carat.
But then he picks up this gold pendant, which he says is 14 carats. It's less pure. And he does the same test. He scratches it, and there's a smudge, and he puts the acid on it.
But the result is really different this time. It just turns in. Oh, it totally just vanished. So I do scratch this on every piece of gold we buy to make sure that it's gold.
It's a very treacherous business. You buy wrong. We're making 2% or 3%. You buy one thing that's not gold.
You're going to lose a whole day's worth of profit. So you don't need fancy equipment. You just got a stone here and some acid, little bottles of acid. That's right.
That's what everybody does. So you heard the expression acid test. This is the kind of thing that expression is referring to. And apparently there are writings dating all the way back to ancient Greece about using a touchstone to judge the purity of gold.
And basically you rub the gold against the stone, and by looking at the smudge it leaves, you can tell how soft the gold is and how pure it is. All right, all right. So I was really at the beginning of this thinking that gold was kind of arbitrary. But it turns out you can make a pretty strong case for it.
Gold is stable. It's non-toxic. It's rare, but it's not too rare. It's easy to test.
And you can find it just sitting in rivers, this beautifully colored golden thing. Let me actually get a whole series on gold, where we bought a bit of gold, like a little bit bigger than the size of a nickel, and we learned all about gold and how it worked. If you want to check out the whole series, the link is in our show notes. Next time on Planet Money, there's a dirty little secret about the internet.
A lot of the software that the internet runs on is written by small teams of unpaid people, so not just one person. And this system might have led to one of the most audacious hacks in cybersecurity history. This was incredibly well orchestrated. I think somebody should make a movie about this.
I mean, I definitely watch it. I'd watch it in high max. We dive into the story of how the XZ hack went down and what that tells us about the strange economics of how most modern software gets made. Our rerun today was produced and fact-checked by Willa Rubin.
It was edited by Keith Romer. Alex Goldmark is our executive producer. I'm Sally Helm. This is NPR.
Thanks for listening.