I saw the title and thought Harry got adopted by this guy. Was disappointed to find out that's not the case.

 

Depending on the actual weight of a galleon they are worth quite a bit. About 750 sterling per Troy ounce. A Troy ounce is about 31 grams, and, IIRC, in PS it is mentioned that galleons were the size of a small hub cap. With a density of about 20 grams per cubic centimeter a galleon is worth an astounding 13k sterling assuming a 6 cm diameter and a 1 cm thickness. Brings to mind the sheer genius of some of the galleon to sterling to galleon exchanges that I have come across.

 

You are assuming a galleon is pure gold. It may be gold plated for all we know.

 

The size of galleons, were never mentioned to my knowledge. The coins the size of hubcaps were mentioned in GoF where wizards all over the world gathered and could have easily just have been a foreign currency.

 

Yeah, the galleons Hermione made apparently looked real but were small enough to still put in your pocket. I don't think many people walk around with hub caps in their pockets.

Magical excuses aside of course.

 

Channeling the wiki here?

 

Just read too many uber!Rich!Harry fics, with Galleons being the size of hubcaps.

 

"You're not the first one who's had trouble with money," said Mr. Roberts, scrutinizing Mr. Weasley closely. "I had two try and pay me with great gold coins the size of hubcaps ten minutes ago."

1:5 seems like a good ratio to me. The wizarding world and muggle world are separated for the most part and the wizards are generally self reliant. With magic, there is no need for automation, and food can be a lot cheaper with dragon dung super-fertilizer. Also, the wizarding world is generally behind modern muggles by several decades, and the value of their money could be the same.

Wizards, as a general statement, try to have as little to do with muggles as possibly, not being able to understand their society. Mr. Weasley works with muggle technology all day long and he is no closer to understanding a single thing about them, and to someone like Lucious Malfoy he would be utterly repulsed by anything related to muggles.

Another reason while the 1:5 conversion would be fine is the fact that wizarding goods cost less. that is the nature of magic. Magic can do things nothing else can, and it can put automation to shame. Magic can make crops grow super fast, etc...

Ollivander sells at least 40 wands a year, which is about 280 galleons. That is most likely more than adequate to live on if something live dragon liver costs one galleon, and bettle eyes costs 5 knuts a scoop. A knut is approximately the same as a pence, and when is the last time you could buy anything for a pence or a penny?

The wizarding world's inflation is simply nowhere near the scale of muggle inflation. Supply and demand is not as big of a concept with magic involved. Who wants to pay a grand for a wand when 7 galleons is more than enough to keep Ollivander's family fed for a month?

Inflation is the driving factor of any price. If the cost of living does not go up (And in the wizarding world, there is very little reason). The wizarding population has hardly risen, if at all. They suffered the reign of Grindlewald, and Voldemort twice in once century. Harry's year was probably effected the most as many of the potential parents were killed in the 70's and early 80's.

The current price of items is probably caused by muggleborns as is. A rich muggleborn discovers he is a wizard and spends a lot of his money on elaborate goods, increasing the amount of money in circulation. On the other hand, who knows how much money is just sitting in Gringotts not being use?

Items don't get much more expensive than a wand, if you go strictly by the books. Omnoculars are 10 galleons each, but they are essentially a beefed up DVR and a very complicated piece of magic. Some advanced books (Which have most likely been charmed to resist some damage and copy.counterfeiting spells). Knight bus fare is 11 sickles to anywhere in the country. The cursed necklace in B&B was 1500, for good reason too.

Harry's triwizard winnings was 1000 galleons, which is more than an adult makes in a year (see Ollivander), and that was enough to help Fred and George open up a shop. The apparition course was 12 galleons.

There is one thing we can conclude; The more complicated or dangerous the magic, or the rarer and item is, the more expensive it will be. Understandable.


I'm sure everyone has read a fic where Harry or someone take a bunch of galleons and melts them into gold or something. I find that idea dumb and pointless. There are a number of reasons that could fail. The gold could be pure, or they could simply be gold in color, it doesn't matter. Goblins have surely taken measures to prevent damage to the coins and to prevent counterfeiting. If that fails, then the statute of secrecy is most likely breached if dealing with the muggles. Either way, the wizarding world is not affected, and if the guy tries to come back to the wizarding world with heaps of cash, someone would notice and the red flags would be risen (Along with the jolly roger).

Anyways, I guess I derailed this topic enough, but I don't think I conveyed my intent good enough.

 

Get rich schemes in the wizarding world are just as hard to do as in our world. The melting galleons and reselling (what your describing) is not possible because if it were so simple, it would have already been done and as such have been made illegal/impossible. That is a rule I think should be extended to all other easily thought up of get rich schemes in fanfiction.

Another point to make. Gringotts does invest its money. If it didn't then why the hell would it exchange galleons for muggle money? Since Gringotts can't use muggle money for anything other then investment (unless they buy muggle goods), they must be investing.

 

A stupid rule, though. For every get rich quick scheme, SOMEONE has to have tried it first before it is eliminated. Why not Harry?

 

Cause Harry's a kid with no knowledge of finances or economics. How realistic is it for him to find a flaw in the system that hasn't already been exploited? You could go for the simple steal people's money scheme but I don't see any arbitrage related schemes working.

 

Because, at some point, some wise guy had to come up with a random, crazy scheme. It's just as realistic for Harry to find a flaw in the system as anyone else. Especially considering the amount of Deus Ex Machinas he carries around in his pockets. (canon)

 

That's what came to your mind? I half-expected him to be adopted by Art Tatum, legendary musician and amongst the greatest of all pianists, whether jazz or classical.

But no.

 

That's exactly why I hate the HP universe's "banking" system. >_>

 

Rin I feel compelled to ask, "What banking system?" The 'banking' system of the Potterverse is little more than a glorified safety deposit box system with a healthy dose of magic sprinkled on top. What more can we expect from Rowling? For the record I am agreeing with you.

 

Wait a second. I don't agree with this at all.

Let me quote myself.

Also we do know that Gringotts is an international bank (I believe this is canon). Magic does allow for international businesses to function and this example proves that they do exist. Therefore a bank would profit by investing in such ventures. Therefore there are no reasons to assume that Gringotts doesn't invest.

I can imagine Gringotts having special accounts which pay interest and are used by the bank for investment. Or maybe all deposits are used for investment and all bank accounts have a 95% reserve requirement.

 

Prove this statement.

Just because Gringotts has individual vaults doesn't mean it doesn't invest.