<p>Quite simply put, this is a world in which almost anything can be made by putting thought and understanding into it aka alchemy. Alchemy was essentially founded when Amestris was founded, and only existed in Xerxes prior to that. Therefore modern alchemy has been around for approximately 400 years by the time the manga/show began.</p>

<p>The technology at this time was also much less advanced than ours. It would have been difficult to produce bank notes or other such fiat currency that would be difficult to reproduce. An alchemist could even produce all of the necessary components in his own home, and it would be much more difficult enforcing the ban on many specific components.</p>

<p>On the other hand, gold is large and heavy. It is also very rare, <a href="http://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust">with only a tiny fraction of the gold on earth available in the crust</a>. Suddenly having a large supply coming through without any regulations down the supply line would be downright suspicious. Manufacturing gold in amounts large enough to disrupt the economy would surely take notice, and thanks to its weight, would surely be much easier to trace.</p>

<p>Of course, this is all assuming that Amestris was designed to withstand the test of time. Really, the homunculi only needed a (relatively) short-term solution that would keep the populace happy until it was time to murder everyone.</p>

CC BY-SA 3.0
2015-04-03T21:44:30.240Z
2015-04-03T21:44:30.240Z
BlueBuddy
<p>I'm not too well versed in the laws of Amestris or its political climate, but the law only prohibits material transmutation to gold, besides human transmutation. I suppose transmutation to silver or other highly valued materials are still allowed, such as petrol, which is sometimes more valuable than gold in the real world. This leads me to believe that the only reason why it only prohibits gold is because the currency is backed by it.</p>

<p>Which leads me to the question, why couldn't they just use <a href="http://en.wikipedia.org/wiki/Fiat_money">fiat currency</a> instead? Why is gold so important to the Amestris economy when other precious metals and resources are allowed to be transmuted?</p>

<fullmetal-alchemist-series>
Why is gold important to Amestris' economy?
# Why is gold important to Amestris' economy?
Posted by: username_0 on 2015-04-03
I'm not too well versed in the laws of Amestris or its political climate, but the law only prohibits material transmutation to gold, besides human transmutation. I suppose transmutation to silver or other highly valued materials are still allowed, such as petrol, which is sometimes more valuable than gold in the real world. This leads me to believe that the only reason why it only prohibits gold is because the currency is backed by it.

Which leads me to the question, why couldn't they just use [fiat currency](http://en.wikipedia.org/wiki/Fiat_money) instead? Why is gold so important to the Amestris economy when other precious metals and resources are allowed to be transmuted?
**Tags:** fullmetal-alchemist-series
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## 1 answers
### Answer by username_1 on 2015-04-03. Score: 6 | Accepted answer
Quite simply put, this is a world in which almost anything can be made by putting thought and understanding into it aka alchemy. Alchemy was essentially founded when Amestris was founded, and only existed in Xerxes prior to that. Therefore modern alchemy has been around for approximately 400 years by the time the manga/show began.

The technology at this time was also much less advanced than ours. It would have been difficult to produce bank notes or other such fiat currency that would be difficult to reproduce. An alchemist could even produce all of the necessary components in his own home, and it would be much more difficult enforcing the ban on many specific components.

On the other hand, gold is large and heavy. It is also very rare, [with only a tiny fraction of the gold on earth available in the crust](http://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust). Suddenly having a large supply coming through without any regulations down the supply line would be downright suspicious. Manufacturing gold in amounts large enough to disrupt the economy would surely take notice, and thanks to its weight, would surely be much easier to trace.

Of course, this is all assuming that Amestris was designed to withstand the test of time. Really, the homunculi only needed a (relatively) short-term solution that would keep the populace happy until it was time to murder everyone.
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