system
Given the following post, respond as if you're commenting on Reddit:
human
[Lord of the Rings] How does the economy in Middle Earth work if the Dwarves mine most of the gold?

As the dwarves love mining and gold, I assume they have the lion share of gold and other precious metals. The Spanish Empire suffered from hyperinflation due to all the gold and silver they stole in the Americas. So does Middle Earth suffer from this?
gpt
Well, consider the Mali Empire of West Africa, which had phenomenally huge stores of gold. 

Simple economics handled the problem for them. Because gold was so easy for them to get, it had little value. So they traded it for salt, which was more valuable to them as a way of preserving food. 

The dwarves thus probably trade their gold for things they need (maybe some protein. Hard to find a good meal down in the mines), and the gold makes its way to mints in various kingdoms where it's processed into currency.