Just back from "The Hobbit" (second instalment) and it was enjoyable but I have a couple of gripes:
- As with the film "Hunger Games: Catching Fire", "The Hobbit" seemed to stop just before the final scene. What is it with Hollywood? It's like an extreme version of the long pause before they announce the winner in shows like X-Factor; only in the Hollywood version you end up paying double and quite possibly end up sitting through a lot of padding.
- I quite liked Smaug, the evil, magpie like dragon. In the earlier film, which I never saw, Smaug destroys the town of Laketown and captures the Lonely Mountain (home of dwarves), which holds untold riches.
Here's the problem. The townsfolk of Laketown appear to living hand to mouth, as all their wealth is being hoarded by Smaug. But the wealth being horded isn't real wealth. It's just jewels, silver and gold. If the supply of these items falls, then the price of them should go up to compensate. If the precious metals are used as currency in Laketown (we did see what looks like silver coins), then you have less money in circulation, which in the long term would have a pure monetary effect (deflation). I saw little sign of either the gems, gold or silver being put to practical use.
We know that Smaug is uncontested in the Lonely Mountain for two centuries, which is plenty of time for the debilitating short term effects of a sudden squeeze in the money supply to work their way through by way of nominal adjustments. Perhaps Laketown is poor not due to Smaug but due to mismanagement by the local master, deliciously played Stephen Fry, who is clearly in the game for himself, and fears a rebellion?
Toward the end of the movie, Bilbo and his team of greedy comrades are cpatured by the town of Laketown. As part of the release bargain, they agree to share the wealth when they go to the mountain and defeat Smaug. Interestingly, Smaug warns Bilbo of the ill effects that will result from the selfish dwarves getting a hold of all this wealth. Perhaps Smaug is right. His ill deeds of the past are a sunk cost and killing Smaug and releasing what looks like trillions of dollars worth of precious metals into the economy would surely create a wave of hyperinflation, with disastrous short-term effect, just as was experienced by the Spanish economy after the conquistadors ransacked a shed load of gold from their lootings of the Americas.
Sometimes it can be best to let a sleeping Smaug lie?