SandySandfort on November 05, 2010, 09:25:44 am
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25

SandySandfort on November 05, 2010, 09:40:53 am
It is the currencies that rise or fall against gold. I think people tend to forget that. Of course, the same can be said for Identical loaves of Bread.

For years, the ECONOMIST has rated the relative value of currencies with their "Big Mac Index." It compares the cost of a Big Mac in different countries. It's done somewhat tongue-in-cheek, but it pretty much reflects other standards of relative value, such as gold. See:

   http://www.economist.com/markets/bigmac/

The actual worth of gold in this society is more or less irrelevant; the emotional response to the amount stolen is the important part of the story.

Double plus plus bingo!

paddyfool on November 05, 2010, 10:02:59 am
I had been a bit puzzled about the use of grams as gold as currency in an economy based on asteroid mining, given predictions that various single asteroids hold more gold than has been mined in Earth's history, or, indeed could ever be excavated from the Earth's crustIf these claims are accurate, then being able to harvest just one such asteroid should cause the prices of precious metals to go into freefall, without a huge upswing in demand.  And yes, living in space also gives us much more demand for metals in general... but does it really do so for gold?

jrl on November 05, 2010, 12:03:25 pm
Somehow, I find the notion of constant value gold a bit hard to swallow.

On the average, the value of gold may be constant, and while the Government has been cooking the books on inflation rates, I don't think there has been 710% inflation since gold was pretty stable in the $280s around the turn of the century.

Now, the Government's claim of 27% inflation since 1999 is obviously bogus,  'cause I've been seeing price rises on things which aren't imported from China more in the realm of 60-100%, and in some cases even higher. (Think health care.)

But gold is subject to speculative bubbles: Think of the price surges in the '80s. . . The current price of gold is factoring in very high inflation expectations. Whether or not that inflation comes to pass remains to be seen.

quadibloc on November 05, 2010, 01:03:32 pm
See, http://bigheadpress.com/eft?page=25
Ah, I had forgotten that page! And, incidentally, it shows that a gold gram must be a lot of money if two grams rents a hotel room for the night.

Also, while nickel-iron asteroids, like nickel-iron meteorites, do contain lots of platinum, iridium, and gold, I don't think they contain much in the way of silver. But I'm going from memory in saying this, so I could be wrong.
« Last Edit: November 05, 2010, 01:05:47 pm by quadibloc »

NeitherRuleNorBeRuled on November 05, 2010, 01:22:40 pm
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25

That's the right idea; unfortunately, hotel room rates on Earth vary to the point (by up to two orders of decimal magnitude)  that it doesn't provide a very good basis for comparison.  In addition, relating it to other "currencies of convenience" (e.g. US Dollars, Continentals), the relative value of the unit measure varies widely even here on Earth.  How much does a "basic" 500g loaf of bread cost  in Dollars (US), Dollars (CDN), Sheckels, Baht,  Dollars (HK), Yuan,  Pesos, and Shillings (Ugandan)?  I'd be quite impressed with anyone here who could answer the question correctly without some research.

ZeissIkon on November 05, 2010, 03:47:53 pm
Well, yes, hotel rooms vary tremendously, but the kind of hotels business travelers routinely stay in are remarkably consistent in price (even if not in quality) across a pretty broad cross section of the USA.  Overall, putting a near-the-port hotel catering to business travelers at 2 grams a night (equivalent of about $90) pegs the relative ration of gold to goods pretty close to where it is on Earth ca. 2010.  These days, that would include free wi-fi, cable TV, local phone calls, and might include a free breakfast -- similar amenities (relative to current technology) are likely to be essential to a hotel being able to attract guests.

The Big Mac Index is interesting, but it might take too much into account -- European/American white bread (and the ingredients to make it) is less common in, say, Beijing than in Buffalo, beef is significantly less common as a foodstuff in Delhi than it is in Detroit, and there are probably places you can buy a Big Mac where they have to import other ingredients (like the cucumbers to make the pickle particles in the Special Sauce -- or the Sauce itself, more likely).  Same for the loaf of bread index.  Beyond that, there are lots of places that use US Dollars where a loaf of bread costs a lot more than the roughly $1.95 I pay (buying a two-pack at Costco); think of the more remote towns in Alaska, where literally everything that isn't shot by the locals has to come in by plane or, at best, jet boat.  The same is likely true of the Belt; get out a away from Ceres Central and lodgings will run a good bit more than two grams a night (or be a great deal less accommodating -- going from something that resembles a hotel room on Earth or Mars to something more like the Japanese "coffin" rooms, with no change in price).

Tucci78 on November 05, 2010, 07:12:30 pm
The geological processes that concentrate gold, which result in gold strikes where gold is plentiful, will probably not exist in the belt. Unless they happened once upon a time. There could be other processes that concentrate gold. We don't know. In recent years it has been profitable to mine gold from sand in concentrations of one part in a million or less. It's possible to profitably mine a stream bed for a tiny amount of gold, leaving behind of course a mess. Would it be profitable in the belt to remove gold in tiny concentrations alloyed into iron. Not with current technology, but maybe later....

So the supply of gold to the belt would be uncertain.  Probably not much would come from Terra, except in the form of thin films plated on equipment.

The demand would be arbitrary, since any amount could used for money, and an increasing amount would be used to make stuff that didn't get recycled right away.

I don't think you've got a very good grasp on High Frontier (G.k. O'Neill, 1976)/Third Industrial Revolution (G. Harry Stine, 1979) space-based resource extraction as predicated upon technology which had been current forty years ago

For example, in the almost-hard vacuum and effectively zero gravity prevailing in the volumes of the asteroid belt, zonal refining methods become practicable on a Brobdingnagian scale.

No gravity means that there is no real energy required to turn the mass of impure source material (as is necessary in a tubular zonal refining furnace here at the bottom of a gravity well, which severely limits the amount of stuff that can be refined this way), and the heat source need only be a huge mirror focusing the radiant energy of the sun into a small volume of the rock being processed by a gradual and careful push into and through the hot zone.

There doesn't have to be much monetary metal content in any particular non-carbonaceous hunk of planetesimal in the asteroid belt for that kind of machinery, once created, to run continuously until there is literally no more rock up there to feed into it. 

This means - as Mr. Gilliland had observed in his Rosinante novels - that "The geological processes that concentrate gold" on Terra are simply not relevant to our consideration of what will be the relative scarcities of gold, silver, platinum, or any other metal accessible to us killer apes once mining gets established up there. 

The "functions four" of money depend very much on the relative scarcity of the commodities in which monetary units are denoted.  High availability of any such commodity - whether it is gold or government fiat - is the essence of monetary inflation. 

For this reason, speculative fiction setting a precious metal standard as "a medium of exchange, a unit of account, a standard of deferred payment, and a store of value" in the asteroid belt is shaky as all hell. 
--
"I is a great believer in peaceful settlements," Jik-jik assured him. "Ain't nobody as peaceful as a dead trouble-maker."
-- Keith Laumer, Retief's War (1966)

terry_freeman on November 05, 2010, 07:45:56 pm
It may take little energy to melt down an asteroid using "free" solar energy, but there are still the costs of transport from "where the asteroid is" to "where the resources are wanted."

There is also the question of time. Unless you have a truly vast reflecting mirror, you only have a limited amount of solar energy to work with; it's going to take a while to melt down that humongous asteroid. Even if you do have a vast mirror, it will need some work to keep it focused on a tiny band.

It's easy to wave hands and say "theoretically, this should be a trivial problem", it's harder to solve the tough engineering and logistical issues.


J Thomas on November 05, 2010, 09:00:29 pm
The geological processes that concentrate gold, which result in gold strikes where gold is plentiful, will probably not exist in the belt. Unless they happened once upon a time. There could be other processes that concentrate gold. We don't know. In recent years it has been profitable to mine gold from sand in concentrations of one part in a million or less. It's possible to profitably mine a stream bed for a tiny amount of gold, leaving behind of course a mess. Would it be profitable in the belt to remove gold in tiny concentrations alloyed into iron. Not with current technology, but maybe later....

So the supply of gold to the belt would be uncertain.  Probably not much would come from Terra, except in the form of thin films plated on equipment.

The demand would be arbitrary, since any amount could used for money, and an increasing amount would be used to make stuff that didn't get recycled right away.

I don't think you've got a very good grasp on High Frontier (G.k. O'Neill, 1976)/Third Industrial Revolution (G. Harry Stine, 1979) space-based resource extraction as predicated upon technology which had been current forty years ago.

No, I don't. I claim that this sort of speculation is usually done sloppily, and there's a very strong chance that if I studied it I would find some fundamental flaw that would keep the method from working as claimed. However, that does not matter. There's a strong chance that humans will find a way that works. If O'Neill and Stine got it wrong 40 years ago it won't make any difference in the long run. We will get it right, if there is a workable method.

Quote
This means - as Mr. Gilliland had observed in his Rosinante novels - that "The geological processes that concentrate gold" on Terra are simply not relevant to our consideration of what will be the relative scarcities of gold, silver, platinum, or any other metal accessible to us killer apes once mining gets established up there.

Yes, I was saying that those will not be relevant. People will concentrate scarce metals out of low concentration at some cost, or they will find high concentrations -- like maybe that mass concentration that was the mcguffin in the story just a little while ago. If we find places with high concentrations of gold etc then we will have the chance to figure out how they got concentrated.

Quote
The "functions four" of money depend very much on the relative scarcity of the commodities in which monetary units are denoted.  High availability of any such commodity - whether it is gold or government fiat - is the essence of monetary inflation.

For this reason, speculative fiction setting a precious metal standard as "a medium of exchange, a unit of account, a standard of deferred payment, and a store of value" in the asteroid belt is shaky as all hell.

Agreed. But if you use a commodity, what should it be? If gold is too common or too easily mined then it won't be good and people should pick some other commodity. Steel is not good because it is too common also.

Possibly oxygen? CO2 would be worth less because it takes an effort to convert it to O2. O2 is almost infinitely divisible. I have a good slogan for using O2 instead of Au.  "You can't breathe gold."

But probably oxygen would be too plentiful too.

Of course, lots of different forms of money are in use in the story. Consider for example the Coca Cola tokens. Each token is worth a set amount of Coca Cola. Until somebody cashes them in, they function as loans to the company that makes the cokes. It can pass as many as it wants of them, and it doesn't have to be able to make enough coke in one day to cash them all in that day.... The coke bottler is a bank!

So anyway, yes, if gold is too easy to mine then it will depreciate, and will be a terrible investment choice and an inflating currency. And if it keeps getting used for stuff faster than it gets mined, it will deflate and will be an investment and not much a medium of exchange. Some commodity will best fit all the criteria and will get exchanged a lot.

quadibloc on November 06, 2010, 12:02:26 am
There is also the question of time. Unless you have a truly vast reflecting mirror, you only have a limited amount of solar energy to work with; it's going to take a while to melt down that humongous asteroid. Even if you do have a vast mirror, it will need some work to keep it focused on a tiny band.
That is a valid point, but for people to understand why it is valid, you actually need to expand on it a little.

The main reason that this could be a problem is that unless one is talking about robots attached to the giant mirrors that build other robots... the issue is how much capital is tied up for how much time in processing an asteroid.

dough560 on November 07, 2010, 01:15:50 am
The emotional cost of the thefts and the restitution process will be interesting.  Her acceptance of her actions, shows an individual leaving childhood and understanding her responsibilities as an adult.  Her age is irrelevant.

terry_freeman on November 07, 2010, 09:08:40 am
Quadibloc, you make a good point; this "free" refining process would involve a large amount of capital. Even self-assembling robots represent a large capital investment.

More to the point, when enough capital resources exist to make it possible to extract precious metals for low marginal costs, similar levels of technology will extract all other raw materials; odds are that prices in gold, silver, and other precious metals will continue to track other goods far better than prices denominated in bits of paper or electrons.

It has been said that in Ancient Rome, an ounce of gold could outfit a man with a top of the line robe, sandal, and other finery appropriate to a wealthy Roman. In 1913, an ounce of gold was worth slightly more than 20 paper dollars and could outfit a gentleman with a suit, shirt, tie, shoes, etc. The same ounce can turn the same trick today - but the value of a paper dollar has declined radically.
 

Karadan on November 07, 2010, 12:53:09 pm
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25

Just noticed, he paid 24 oz for rooms that cost 12 g per week.  How long was he expecting to stay?

Edit: or is that his total account?  Seems odd they'd just display that outright.
« Last Edit: November 07, 2010, 01:02:23 pm by Karadan »

terry_freeman on November 07, 2010, 01:06:03 pm
It is strange for the room price to be quoted in grams, and the screen shows ounces. There is not enough information to be sure whether the screen is showing a debit of 24 ounces, or an account balance. Since the clerk says "looks like you came prepared", it may be the total account balance.

I've never run one of these credit/debit terminals, but I think they only give a go/no-go answer to a particular charge. For privacy reasons, I think most customers would prefer not to reveal their account balance to random clerks and cashiers.

Assume two rooms times 12 grams per week, that would be 24 grams per week. There are about 31 grams per ounce. The answer to your hypothetical would be approximately 31 weeks.

I'm guessing that's the cartoon equivalent of a typo. It is likely that "24 grams" was intended.
 

 

anything