4 ms·

When you start measuring "profit" in the trillions, doesn't the measurement become somewhat meaningless? Like, imagine Planetary Resources or SpaceX gets into t

When you start measuring "profit" in the trillions, doesn't the measurement become somewhat meaningless? Like, imagine Planetary Resources or SpaceX gets into this and brings back a haul of metals worth approximately 100 trillion. How devastating would that be to the economy? What would it do to the price of the metals involved? I'm not saying that bringing this quantity of metal into the economy is a bad thing necessarily, but it would have enough of an impact on the market to make these values completely inaccurate.

maaku 12y ago
Such an operation would take decades, and centuries probably to exhaust and return to Earth the entire asteroid. In the process and in response the size of the Earth economy will grow due to the introduction of a vast new supply of industrial materials. Introduction of extraterrestrial resources will cause these commodity prices to fall. But falling prices will cause industrial use (and world GDP) to rise. How much will prices fall, and how much will demand rise, and therefore how much maximum revenue can be extracted? This is not an easy calculation.
- cgriswald 12y ago
  Looks like a simple differential equation to me. And we already have the models. The only real variable would be the rate at which materials are retrieved. And even that wouldn't be very variable, because SpaceX or whoever would use the rate that optimized their profits.
  - d357r0y3r 12y ago
    We have some models, but certainly none that are accurate for this kind of economic activity over the period of time we're talking about.
  - sirclueless 12y ago
    There's no good model out there I know of for the rate of innovation. Massive availability of a resource should spur innovation around its use. It's very difficult to predict the future demand for a resource beyond a timescale of decades. A good historical parallel for this kind of situation might be aluminum, which was a precious metal for many years. When it suddenly became available in large quantities due to new chemical processes for extracting it, supply skyrocketed and led to whole new industries. I don't think anyone in 1890 could have guessed what the ultimate demand for aluminum would settle at, even though it was clear the price was dropping precipitously.
    - Rumford 12y ago
      Exactly. If economic growth was just like microbe growth in a petri dish, sure, a simple equation would suffice. But people choose and act based on their own thoughts, opinions, and goals, and they are always readjusting to new input and information. Economics can tell us reliably that if you add supply, you press the price downward. What economics can't tell you is what crazy and amazing things the humans will do in response to that.
riazrizvi 12y ago
Oh sure, those valuations are BS, that website is promoting something. Price is dynamic, a function of supply-demand. It's why DeBeers stores diamonds in vaults - if they could sell them at current prices they would. Since iron is relatively abundant on earth, I think the cost of iron is in processing. Space iron is far, far more expensive to process than earth iron ore or earth iron salvage. I looked up shipping costs for example on nasa.gov and they don't even list a number, instead they quote CALL ME. You know the prices are steep when they don't list them.
therealwill 12y ago
It is somewhat likely that once we get to the point of mining 100+ trillion dollar asteroids that we will be in a post/near-post scarcity economy.
AngrySkillzz 12y ago
Supposedly they will sell the metals in moderate amounts over a long period of time to decrease the chance of a supply shock. The price will certainly drop as the supply of metals will increase, but it would be less likely to bottom-out if the market is given time to adjust; demand would probably increase as we found more applications for cheaper metals.

maaku 12y ago

Such an operation would take decades, and centuries probably to exhaust and return to Earth the entire asteroid. In the process and in response the size of the Earth economy will grow due to the introduction of a vast new supply of industrial materials. Introduction of extraterrestrial resources will cause these commodity prices to fall. But falling prices will cause industrial use (and world GDP) to rise. How much will prices fall, and how much will demand rise, and therefore how much maximum revenue can be extracted? This is not an easy calculation.

cgriswald 12y ago
Looks like a simple differential equation to me. And we already have the models. The only real variable would be the rate at which materials are retrieved. And even that wouldn't be very variable, because SpaceX or whoever would use the rate that optimized their profits.
- d357r0y3r 12y ago
  We have some models, but certainly none that are accurate for this kind of economic activity over the period of time we're talking about.
- sirclueless 12y ago
  There's no good model out there I know of for the rate of innovation. Massive availability of a resource should spur innovation around its use. It's very difficult to predict the future demand for a resource beyond a timescale of decades. A good historical parallel for this kind of situation might be aluminum, which was a precious metal for many years. When it suddenly became available in large quantities due to new chemical processes for extracting it, supply skyrocketed and led to whole new industries. I don't think anyone in 1890 could have guessed what the ultimate demand for aluminum would settle at, even though it was clear the price was dropping precipitously.
  - Rumford 12y ago
    Exactly. If economic growth was just like microbe growth in a petri dish, sure, a simple equation would suffice. But people choose and act based on their own thoughts, opinions, and goals, and they are always readjusting to new input and information. Economics can tell us reliably that if you add supply, you press the price downward. What economics can't tell you is what crazy and amazing things the humans will do in response to that.

riazrizvi 12y ago

Oh sure, those valuations are BS, that website is promoting something. Price is dynamic, a function of supply-demand. It's why DeBeers stores diamonds in vaults - if they could sell them at current prices they would. Since iron is relatively abundant on earth, I think the cost of iron is in processing. Space iron is far, far more expensive to process than earth iron ore or earth iron salvage. I looked up shipping costs for example on nasa.gov and they don't even list a number, instead they quote CALL ME. You know the prices are steep when they don't list them.

therealwill 12y ago

It is somewhat likely that once we get to the point of mining 100+ trillion dollar asteroids that we will be in a post/near-post scarcity economy.

AngrySkillzz 12y ago

Supposedly they will sell the metals in moderate amounts over a long period of time to decrease the chance of a supply shock. The price will certainly drop as the supply of metals will increase, but it would be less likely to bottom-out if the market is given time to adjust; demand would probably increase as we found more applications for cheaper metals.