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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?


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2015-04-03T20:33:12.727
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question
fullmetal-alchemist-series
Why is gold important to Amestris' economy?


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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answer