That Giant Asteroid of Gold Won’t Make Us Richer
Creating wealth goes way beyond bringing lots of precious metal to Earth.
Gold to Earth. Come in, Earth.
Photographer: BloombergRejoice, people of Earth! News outlets are reporting that NASA is planning to visit an asteroid made of gold and other precious metals! At current prices, the minerals contained in asteroid 16 Psyche are said to be worth $700 quintillion -- enough to give everyone on the planet $93 billion. We’re all going to be richer than Jeff Bezos!
OK, now for the bad news: This isn’t going to happen. Yes, 16 Psyche and other asteroids will probably be mined for their metals. But once those metals start hitting the market in large quantities, they’re unlikely to be precious for much longer. As any introductory economics student knows, price is a function of relative scarcity -- flood the market with gold, and it will go from being a rarity to being a common decoration. Supply goes up, price goes down.