

During the formation of Earth, molten iron sank to its centre to make the core. This took with it the vast majority of the planet's precious metals -- such as gold and platinum. In fact, there are enough precious metals in the core to cover the entire surface of Earth with a four-metre thick layer . _SD

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With all the recent talk about the new venture Planetary Resources, Inc. , and its goal to mine the asteroids for their millions of $trillions worth of gold, platinum, and other precious resources, it is easy to forget that everyday we are walking over oceans of gold deep beneath our feet. More from Nature journal research , which claims that the heavier metals we use now -- including the "precious metals" -- came from a " terminal bombardment " of Earth by metal carrying asteroids.

The first estimate of proved crude oil reserves worldwide, made in 1944, was 51 billion barrels. Today, that number is 1.4 trillion barrels, and cumulative production in the last 66 years has been twenty times the original estimate.



...Natural gas and coal proved reserves have also increased several-fold despite decades of production.5 Reserves of tin, copper, iron ore, lead, and zinc were also higher in 2000 than in 1950, despite the fact that production in the half century in between substantially exceeded reserves in 1950.6...The story would be similar for other minerals, from bauxite to uranium.



...The expansionist view of mineral resources is often associated with Julian Simon, who won the most famous wager in the history of economics regarding the future scarcity of minerals. Simon and Paul Ehrlich agreed that if resources were to become scarcer in the future, their prices, adjusted for inflation, would rise. At Simon’s invitation, in 1980, Paul Ehrlich et al. chose five minerals: chrome, copper, nickel, tin, and tungsten. If, in 1990, the prices of the minerals were to rise, Simon would pay; if the prices dropped, the consortium would pay.



Simon won resoundingly. The prices of most of the picked minerals had fallen in dollar terms between 1980 and 1990, and each fell in inflation-adjusted terms—despite 822 million more people consuming “depletable” resources.7



In the annals of the history of economic thought, Erich Zimmermann, of the Institutionalist school of economics, not Simon, got there first with what he called a functional theory of resources.



According to Zimmermann, resources are not known, fixed things; they are what humans employ to service wants at a given time. Human “appraisal” turns the “neutral stuff” of the earth into resources. What are resources today may not be tomorrow, and vice versa.8



Zimmermann wrote: Resources are highly dynamic functional concepts; they are not, they become, they evolve out of the triune interaction of nature, man, and culture, in which nature sets outer limits, but man and culture are largely responsible for the portion of physical totality that is made available for human use. 9 Zimmermann concluded: “Knowledge is truly the mother of all resources.”10 _master resource blog

If there is enough precious metal in the Earth's core to cover the entire planetary surface with a 4 metre thick layer, why are the billionaires of Google talking about mining the asteroids for precious metal? Because the Earth's molten core is inaccessible, for one reason. But even if the core were accessible, it would be almost impossible to separate economic quantities of precious metals from the massive amounts of not-quite-as-precious metals such as iron and nickel.In other words, at this time it is cheaper and more economically viable to build machines to mine the asteroids for precious metals, than to build machines to tap into the oceans of gold inside the Earth's core.And so, for now, we are stuck with the paltry amount of gold given to us by the terminal bombardment of metallic asteroids. And so most of us have heard the term "peak gold," used in much the same sense as the term "peak oil" is used -- to suggest a permanent depletion and a terminal decline of production.Perhaps we should take a look at what has gone wrong with the confident -- but failed -- predictions of "peak oil," in order to understand some of the ways in which "peak gold" might fall on hard times:Humans not only discover new sources of vital, depletable resources, but they also devise substitutions for these scarce materials, from cheaper and more plentiful materials. Or they find other ingenious workarounds and alternatives. If the proper incentives are there, humans will find ways around problems that would have been "unimaginable" or "inconceivable" before the fact. (Do those words mean what we think they mean?)Human societies are incentivised by institutional policies -- particularly government policies. In democratic societies, voters determine what sorts of incentives their institutions will set for them when they step into the voting booth. If voters are unaware of the crucial importance of incentives, and are instead manipulated by clever campaign rhetoric and promises, the institutional incentives that are ultimately set are likely to be sub-optimal.We are walking on oceans of gold. But we are impoverished by foolish institutional (government) incentives and an absent-minded neglect of our civic responsibilities. It is our choice, our minds, our ingenuity...

Labels: asteroids, creativity, invention