And this is where your failure of comprehension is. In the end, there are businesses that need a material in order to function. They cannot afford to just sit and wait for the price to come down, they must purchase it in order to continue to function.
Okay... but you realize you just proved my point again? The entire issue with an asteroid is that it provides so many resources it ruins it's own market. Those businesses don't
need the asteroid because it outstrips existing supply so much and there can't have been any industry that could possibly have needed the asteroid, because there was no asteroid for those businesses to use. Therefore the market will be glutted no matter what.
Expecting industry to need the asteroid is like expecting there to be an elephant-eating dinosaur hanging out in an area that's never had elephants (or other large game) before. Said predator can't exist to eat the suddenly-appearing elephant because it would have starved to death in the decades before the elephant suddenly showed up.
After the first asteroid mining will actually pick up hugely because the industrial demand for the second asteroid will exist, having been built from the first one. It's the first one that will hose it's owners.
The entire economy is more than just investment and perceived value. There is a hard line where if you can only make a product at a loss, unless the government or a similar party interfere, you will no longer be able to keep making that product.
Gold, as Flintsteel noted, is a terrible comparison, but it's not just because it has a history as a currency, it's also because its primary use is as a luxury good. The majority of gold's value is for jewelry and 'investment reserve,' because people are constantly convinced to invest in gold, on the principle that it will hold value even when currency collapses, even though anybody who looks at the actual market value, will see that it constantly massively fluctuates. It does have industrial uses, but last time I checked, that was less than 10% of the market.
Silver is in a similar situation. It is used primarily as a luxury good and an investment material, with some limited industrial uses.
And again with missing the point and strawmanning what I said. I didn't make a comparison with gold, I didn't make a comparison with anything.
Your false claim several posts above was that the market reacts to supply and only has a minor input from people's expectations of the future. What I proved is that a commodity can massively shift based on expectations of the future. It doesn't matter if I used gold, silver, or frozen concentrated orange juice. My point was made and, honestly, crying about how one precious metal used in jewelry with limited industrial applications is slightly different from another precious metal used in jewelry with limited industrial applications is ridiculous. If you're that nitpicky there's absolutely
nothing we can compare to platinum except platinum. Fortunately I'm not comparing in the first place, merely proving how the market reacts to expectations, so my point stands.
Let's talk about another largely-luxury item with limited industrial use, Diamons. Ever heard of the DeBeers cartel?
here are a few articles from a quick search on how they've induced a deliberate market shortage on a resource that
is accessed on the Earth, rather than in space. And they've done so for more than a
century.
To sum up, without this artificial induced shortage, small diamonds would probably cost single or double-digit sums. A quick search shows an
article listing diamond prices 1500 US $ for a 0.5 carat diamond, 4.5-6k US$ for a 1 carat diamond, and 18-21k US$ for a 2 carat diamond. To be clear 1 carat is
half of a gram.
And it is not a secret that the diamond supply is artificially controlled. Economists and investors know this is a thing. The cartel's control has just been
that strong, and this is in spite of the fact that their ability to control it is a lot weaker than, say, having sole control of a big rock that is up in
orbit.
So yes, we know that the market will not just drop prices to nothing because a large supply is possible in the imminent future. In fact, markets will tolerate and accept blatant monopolistic practices that artificially shorten supplies and induce obscenely high prices. A company formed to drag an asteroid to orbit then mine it there, while *not* trying to control the market in its entirety is
absolutely possible.
We know this, because
the same kind of thing is already happening in real life.
Okay, so we can also file you under "Doesn't know jack about the diamond market." De Beers had it's back broken back in the early 90s. They control only
slightly over 1/3rd of the market for diamonds. Also the entire "stock" they had was sold between 2001 and 2004. Interestingly enough if you look at a chart of diamond prices, there was
no drop in price during that period, rather a fairly steady rise. Almost as if traders already knew about a supply and priced things based on that expected supply, not how much was in the market at that moment. Thansk for helping prove my point again, though.
In reality your sources are pulling the wool over your eyes. Whenever anybody presents figures about "diamonds" without specifying what kind, especially if they're pushing a conspiracy theory, odds are they're trying to sucker you. Diamonds come in two basic types, industrial grade powered dust and large gem quality stones. Industrial stuff suited only to be found in a drill bit or saw is indeed extremely common and, as your own sources point out, trade at a few dollars a carat. Large gem quality stones suitable for a ring setting, OTOH, are extremely hard to find and expensive as a result. As for why gem quality stones are so valuable, let me introduce you to Big Hole.
This diamond mine is 42 acres in surface area dug to a depth of 790 feet. Massive, massive amounts of rock were moved. For what?
About 14.5 million carats, enough to fill a truck bed, out of a hole hundreds of feet deep and over 40 acres in size. But it's worse than that. We don't know the exact ratio of industrial diamonds that came from Big Hole but the US Geological Survey indicates that on average, in that area, mines produce about
2/3rds industrial stones (check page 21). So somewhere in the area of 5 million carats of gem quality stones, about enough to fill a car's trunk, from that massive hole.
That's why diamonds are so expensive, not some magical conspiracy by a company that hasn't been able to control the market for over three decades. The reason I know about this is my day job is a gemologist so I'm extremely plugged into what's happening with diamonds at any given time and the history of them.
...my bad, I meant the opposite. I have corrected the post.
My point was that not-yet-exploited resources do not greatly impact the current sale price.
Also, the cost of exploitation is going to be factored into material cost, just like for every other material. Even if the ongoing unit cost is low, the initial capitalization cost will be factored into the final cost like it always is.
Oh, then you're wrong and your point doesn't actually exist. Answer me this:
What caused that massive drop followed by a massive rebound in platinum prices the space of a few days? Note this wasn't futures, this chart is actual commodity prices. Under your theory, the only explanation is that there was a suddenly-exploited resource, say a new mine, that was somehow used up in the space of a week. Does that seem reasonable? Or were buyers reacting to expectations of what future supply and demand might be?
For those who actually wonder, this sudden drop was caused by rumors about COVID-19 affecting specific factories and mines, and the rebound happened when the rumors proved false. In other worse, pure speculation about what the future supply would
be, exactly as I've been saying.
How will it be kept from steering off course?
Orbital mechanics are really,
really well understood. Remember Edmund Halley was able to accurately predict the movement of Halley's comet in
1705. We've known how things move in space accurately for a long time. Honestly a much bigger risk than the asteroid haring off on it's own will be industrial sabotage or some terrorist hijacking it. That would be a good reason to send a human crew rather than rely on robots to move it.
And of course its equally plausible that the US government paid for hauling said asteroid to Earth orbit and then leased it to be mined since the benefits to the economy and thus tax revenue far outweigh the costs of moving the thing by a probably ridiculous amount
Thinking on it, I believe you're right and this is the most likely way an asteroid will first be attained. While I'm not a fan of big government, the prisoner's dilemma is one issue governments solve very well but the private sector solves poorly, and asteroid mining, as I've proven, has a massive prisoner's dilemma to it.
