Asteroid Mining: The Industry that will Decrease Gold Prices

"Shortage of resources is not a fact; it is an illusion born of ignorance" - John S Lewis, author of Mining the Sky, 1997.

In this article, I talk about why asteroid mining, an industry of +$100T, will most likely decrease the value of gold and hard commodities, and not a little. I think the investment industry should have much more information about the industries of the future. This price decrease could occur in an instant in which a new supply it's guaranteed.

Gold and precious metals, as well as other types of hard and soft raw materials, have been considered in recent centuries as an inflation-hedge investment asset and the ideal example of a decorrelated portfolio against economic recessions.

Most portfolio managers still regard gold and precious metals as a protective asset against recessions, because they are, but in this article, I will show you how in the future, in terms of decades, the most likely scenario is that it ceases to be so.

The investment industry is up to change massively.

I think there is no greater mistake in the investment industry than believing what used to work in the past will work forever. The correlation between markets, for example, gold & precious metals as an opposite direction against global stock markets, have been true until now, but that does not mean it will be forever. An economy is a machine constantly changing itself and most investment professionals can have a very bad time thinking about it. Correlation percentages are changing constantly, they are not fixed.

Most portfolio managers are probably unaware of the industries and megatrends of our future, including the coming +$100T asteroid mining industry. Asteroid mining will probably be the greatest increase in raw materials supply ever experienced in contemporary history. The space-based economy will change the world forever.

Scarcity, the cause why gold is valuable, ending up.

The main reason why gold is valuable is because of its low reserves on our planet. According to Mene, for every gram of gold on earth, there are 400,000 grams of diamonds. Gold is not valuable for any other reason, including its appearance; there are dozens of industrial metal by-products, such as brass, that look beautiful, but there are massively cheap due to the extensive metal reserves on earth.

Whenever gold reserves increase, due to supply and demand, it is very likely that their value will decrease. Well, gold reserves will not increase or decrease, what will increase or decrease is our access to them. The main fundamental argument for supporting the long-term steady increase in gold prices is the increase in gold demand with a decrease in gold reserves.

The problem here is, due to emerging technologies, the access to gold reserves are likely to increase in the coming decades as never ever before, and the main fundamental argument for a bullish gold has come to an end. We must remember that gold, like any other metal on earth, comes from space, and was introduced to our planet when it was forming some time ago.

The decline in the price of gold will not occur due to its artificial production. The chemical advance of Chrysopoeia, the artificial production of gold, could have been an example of new gold supply, but the process is impressively expensive. The 196Hg mercury isotope, which occurs at a frequency of 0.15% in natural mercury, or the 198Hg mercury isotope, which makes up 9.97%, can be converted to gold by slow neutron capture and decay into the only stable gold isotope, 197Au. It has already been carried out by Hantaro Nagaoka in 1924 or by Glenn Seaborg in the 1980s at the Lawrence Berkeley Laboratory.

Asteroid mining: a +$100T industry.

In the coming decades, C-Type, S-Type, and M-Type asteroid mining will most likely become the main source of metals for the earth and for the space-based economy. Due to new high supply, although it is likely that demand will also increase, prices of hard commodities will most likely decrease at a high level.

Metal asteroids are composed of up to 80% iron and 20% a mixture of nickel, iridium, palladium, platinum, gold, magnesium and other precious metals such as osmium, ruthenium, and rhodium. Most asteroid mining expeditions could not offer profits due to the high cost of transport and the low cost of commodity prices, but the present differs completely from this theory and large profits are made using solar energy.

Economists have pointed to the potential of asteroid mining as an industry of +$100T, which, looking at the figures, is a really prudent expectation. Some of the first target asteroids are Anteros, Ryugu, Didymos, 2001 CC21 or 1992 TC, to name a few.

Asterank is an excellent website that you should enter for discovering more than 600,000 asteroids and their expected value.

The three types of mineable asteroids.

C-type asteroids have a great abundance of water and a lot of organic carbon, phosphorus and other key fertilizer ingredients that could be used to grow food. Costs could be reduced by using the asteroid's available water.

S-type asteroids, the most common mining target by companies, carry little water but look more attractive because they contain numerous metals including nickel, cobalt and more valuable metals such as gold, platinum, and rhodium. A small 10-meter S-type asteroid contains about 650,000 kg (1,433,000 lb) of metal with 50 kg (110 lb) in the form of rare metals such as platinum and gold.

M-type asteroids, the more valuable ones, are rare but contain up to 10 times more metal than S-type asteroids.

Companies.

Companies like Planetary Resources, Deep Space Industries (now Bradford Space), Planetoid Mines or Moon Express will transform the stage forever. The most likely scenario is that what will happen is a three-, four- or even five-digit increase in the supply of most industrial metals, rare earth products, and precious metals, which will, inevitably, lead to a decrease in their value. As with most of the industries and megatrends of our future, the best ways to enter in them as an investor is through private equity & late-stage venture capital.

Are you an investor focused on past industries? Or are you conscious that emerging technologies will soon make yesterday strategies useless?

I hope you are prepared to face the next decades and to offer the best results to your clients.

Best regards,

Frank

"To me, the human race is similar to a crowd of bored, starving people standing on a sidewalk fighting over a few dried up grains of rice (energy and resources on Earth) who don't realize that all they have to do is turn around and cross a moderately busy street to get to an all you can eat 5 star steak house giving away food for free (the asteroids and comets and other resources in our solar system)." James S Berry.