It’s a touch more complex than all that. But take a moment to consider-
Goblin silver never gets dirty. Goblin weapons and armor never rust and goblins can make indestructible armor. Every coin is hand made by a goblin. Goblins exchange muggle and wizard currency and so also must be aware of the possibility- so my first question is: you don’t think goblins, who’s work with metals is legend, might somehow protect their coins? But let’s dig deeper...
Rowling says the exchange rate isn’t fixed- but using a frozen moment in time where she did provide a “current” exchange- but he don’t actually know what the size, weight, metal content or purity of a galleon is. If a galleon is pure gold and magic isn’t used- pure gold is soft enough to mold with bare hands. It scratches easily too. So a gold alloy would be needed for coins in circulation- or magic that would make the gold obviously “fake” to muggles. So whatever the exchange rate is given as we can’t assume it is based on a muggle value of the precious materials and is more likely some sort of calculation goblins apply based on whatever factors- because wizard Money and economics have no reason to be indexed to muggle ones and vice versa.
But that also means we have no reason to believe that precious metals themselves have a value indexed to currency in the wizard world. For example many countries I the real world use coins that cost more or less in materials and labor than the actual currency value printed to the coin or the buying power the coin represents. The idea that one could simply take precious metals and re forge them into wizard currency is also suspect. A wizard coin must be forged by a goblin- each one marked with the ID of the goblin who made it.
Much like in the real world the smelting of coins to raw materials is illegal- it’s safe to assume that the goblins might not be keen on people melting the coins they make down and even if they do not somehow have a method of determining that the metal comes from their own stocks using magic (which would be very easy to tell if the metal keeps certain properties like not getting dirty), and no magic charms otherwise to authenticate or track it- most existing mints won’t simply agree to take raw precious material and turn it to currency for you because you asked.
So to know if there is any value in this process at all- we have to know what the cost of raw gold is within the wizard world. Keep in mind that the exchange rate given makes a Knut worth about a penny. We’ve seen the news paper sell for 1 Knut and 6 knuts in different books. 3 butter beers sold for less than $1 in real money meaning each was about .30. Compare that to costs of actual items in the U.K.- where a soda or bottle drink is likely more than 3x that cost and a cheap paper used to be .50-1.00- so even a cheap daily news would cost up to 50-100x the price in the muggle world.
That means muggle money has a disproportionate purchasing power in a wizard economy- your $5 goes much farther in the wizard world than the muggle one. A “gold buffalo” coin is worth $50 in the USA at face value. Exchanged into the wizard world it is likely worth far more than the value of raw gold because that $50 multiplies it’s purchasing price hundreds of times. It seems unlikely such an obvious trick hadn’t been tried in a world where sports cheats and cons go to any and all lengths and magic allows great scope to ability to cheat- and no ones thought of this or put controls against it in place? You likely don’t see it because it’s not practical.
Tl:dr- Goblins are rich and powerful magic creatures who control the wizard economy. Their abilities to imbue metal with magical properties surpass wizards and are legendary. The coins wizards use are hand made by goblins using goblin magic. There is no way that they are not somehow magically protected and it’s unlikely goblins would just mint you coins because you asked. There are also issues with exchange rates etc and indexing of currency.
there's got to be at least some goblins who got a little selfish and decided to go rogue and start counterfeiting money, and there's probably also a division in the ministry and other magical facilities dedicated to money fraud, the magic society also has some parallels to muggle society, so what I'm really getting at is there's probably a magic mafia. Now that's a movie i wanna see.
I’d agree. I mean- in a way the goblins already are. When that one dude bet the farm harry would win quidditch but harry and Cedric both did he disappeared. That implies he had something to be scared of. Goblins have fought wars against wizards and are allowed weapons, they also took a unified front and several times in the series held long standing grudges such as not supporting dumbledoors army because of slights. That should have been a major part of a sequel I think too. Especially one set in the past- a magic mafia seems like it would be a natural element to their world- at least at some point.
We really need to get rid of pennies in the real world. If I find a penny on the floor, I won't pick it up with my bare hands. I don't know where that shit has been and it's not worth it.
....That's literally how I make my money. Currency exchange. The 17:1 ratio also fluctuates, obviously, but it's the same fucking concept. The exact. Same. Fucking. Concept.
Goblin silver never gets dirty. Goblin weapons and armor never rust and goblins can make indestructible armor. Every coin is hand made by a goblin. Goblins exchange muggle and wizard currency and so also must be aware of the possibility- so my first question is: you don’t think goblins, who’s work with metals is legend, might somehow protect their coins? But let’s dig deeper...