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Fun on Friday: An Asteroid Filled With Fool’s Gold

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Have you heard about the “gold” asteroid?

You probably have. It’s been all over the news. Apparently, NASA is planning a mission to a Massachusetts-size lump of rock named “16 Psyche” located in the asteroid belt between Mars and Jupiter.

There’s been widespread reporting that this mission could pave the way for asteroid mining. And that’s led to speculation that it could make us all rich!

This is dumb.

A headline in The Sun screamed, “MIDAS ROCK Giant golden asteroid contains enough heavy metals to make everyone on Earth a billionaire – and Nasa is heading there in 2022.”

On a side-note, whenever I hear the world “Midas,” I think muffler. Muffler rock. That doesn’t make much sense.

Anyway, this lump of space rock is going to turn us all rich and probably also foster world peace. According to The Sun, the metals in this single asteroid are worth  £8,000 quadrillion. That’s about $10,038 quadrillion. Give or take a buck or two.

This is amazingly good news.

Except that it’s not.

All this talk about getting rich off space gold reveals a horrifying economic ignorance. And also journalistic ineptitude.

I know. I shouldn’t expect much from The Sun. But the problem is that so many other media outlets just took the headline and ran with it. Now we have all these people running around thinking their problems are solved because space gold is going to make the world rich. It’s worse than these silly universal basic income schemes.

Now I’m not a rocket scientist. But I am a dedicated journalist. So, I’m going to pop some of these myths like a Fed-induced asset bubble.

In the first place, contrary to what you might have read, we’re not talking about a “gold asteroid.” In fact, scientists aren’t altogether sure what it’s made of. It’s all wild speculation — like the stock market. It appears that it’s about 90% iron. There is also likely a significant amount of nickel. So, no, there isn’t solid gold floating in space. Sorry.

Nevertheless, this rock is huge. That means even if it contains only a small percentage of gold, we’re still talking a lot of yellow metal. So, we’re all rich, right.

Wrong.

First off, nobody seems to be considering how difficult it would be to mine an asteroid floating in space. I’m going to guess it’s probably not gonna be cheap. Or easy.

In the second place, we have to consider basic economics. I know. We don’t do that most of the time these days. The wild faith in the proposed policies of AOC makes that clear.

The fact is that even if we could haul a bunch of gold to earth from this asteroid, we couldn’t just hand it out and make everybody rich. It would just tank the price of gold. It’s as likely to make everybody in the world a billionaire as the recent minimum wage increase in Venezuela is going to make Venezuelans rich. Basically, it would be just like firing up the printing presses, running off $100 bills and handing them out — you know — like the Fed. We call this inflation. And it doesn’t make everybody rich. Governments have been doing it for decades.  I ain’t rich.

So, I’m sorry. If you were planning your future based on your gold asteroid windfall, just stop. It’s fool’s gold.

Now — there is a way to get gold and build your wealth over time. To learn more about that, don’t call NASA. Call a SchiffGold precious metals specialist at 1-888-GOLD-160.

Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the-wall and off-beat stories relating to precious metals and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.


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About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
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