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This would have very interesting market dynamics that the article touches on a little bit. In order to actually make use of the gold, you have to build some sor

This would have very interesting market dynamics that the article touches on a little bit. In order to actually make use of the gold, you have to build some sort of industrial base in orbit. So while the total pool of gold within humanity's grasp would increase substantially, the availability would not necessarily increase in the same way. If I buy gold in a commodities market, it is kept in a holding area and rarely moved, but I can for a fee have that gold shipped to me if I really wanted to. Since there is not a substantial price difference in shipping gold to one place vs another on Earth (within the same order of magnitude at least), it doesn't really matter "who" I buy the gold from, so for purely terrestrial markets, gold is gold. But space-based gold would be much more expensive to ship back to Earth, even if gravity is generally on our side in that case, since you are subsidizing the infrastructure required to make that happen. And this probably wouldn't happen that much anyway, since the space-based gold would likely be kept in space to build more space-based infrastructure. So would that create 2 different prices for gold? Or would space-based gold be much cheaper than terrestrial gold, offset by some coefficient that would be its relative movement cost between realms? I am by no means an economics expert, I'm just musing. I believe I'm essentially talking about arbitrage, but need to refresh my memory on this.

yehaaa 7y ago
Somewhat off topic, but I found the idea of different prices interesting. It reminds me of industrial diamonds vs natural diamonds. If I have understood things correctly, industrial diamonds have reached a level of quality that is at the same or even higher quality than natural diamonds. However that has still not affected the price of natural diamonds for some reason.
dmurray 7y ago
There are already different prices for gold in Zurich, London, New York, Tokyo and Hong Kong, the five main locations where gold is traded electronically. There are brokers who will arrange the trade for you to buy gold in one and sell in the other, at the current "loco swap" price. If that price moves further from zero than the cost of insuring and transporting gold bars with a company like Brinks, then someone does step in and complete the arbitrage. If I remember right, the prices don't typically move more than about a dollar an ounce from zero, except for Tokyo where the purity rules are different so there is an extra step involved in melting down the bars and getting them restamped. If there was some demand for holding gold in space, I'd expect roughly the same economics to apply.

yehaaa 7y ago

Somewhat off topic, but I found the idea of different prices interesting. It reminds me of industrial diamonds vs natural diamonds. If I have understood things correctly, industrial diamonds have reached a level of quality that is at the same or even higher quality than natural diamonds. However that has still not affected the price of natural diamonds for some reason.

dmurray 7y ago

There are already different prices for gold in Zurich, London, New York, Tokyo and Hong Kong, the five main locations where gold is traded electronically. There are brokers who will arrange the trade for you to buy gold in one and sell in the other, at the current "loco swap" price. If that price moves further from zero than the cost of insuring and transporting gold bars with a company like Brinks, then someone does step in and complete the arbitrage. If I remember right, the prices don't typically move more than about a dollar an ounce from zero, except for Tokyo where the purity rules are different so there is an extra step involved in melting down the bars and getting them restamped. If there was some demand for holding gold in space, I'd expect roughly the same economics to apply.