Conversely, the moons gravity affects the largest bodies of water on earth but yet nothing else.
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You would have to magnetize the paperclip in order for it to point north and south. Since there is not a lot of ferrous material in paper clips you would need to put it on water or suspend it so it is barely balancing on something so it can turn more easily. That is what a compass does, the needle is not just laid on the surface but suspended so it is easily able to spin with little force. Take a paper clip, rub a magnet on it in the same direction a few times, and set it on something that floats, like a cork or piece of plastic. If you have a very steady hand you can just set a dry paper clip on water and it will float (different long story) and it WILL act like a compass.
The moon DOES effect everything on Earth. That is why there are high tides on both sides of the Earth at the same time. Because the entire far side of the Earth (the side further from the moon) is being pulled too but it is being pulled less than the close side. That makes a bulge on both sides.
Just to clarify, and im not saying you do not know this, but magnetism and gravity are different forces but that act similarly.
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