drbubb Posted September 6, 2013 Report Share Posted September 6, 2013 The Bet - Defusing the Population Bomb . Two economists, one big Issue : LIMITS. . Paul Ehrlich wrote the Population Bomb in the 1970's, predicting that rising population would put up the prices of all resources, including food, energy, metals, and everything else. In fact, he thought a famine was already starting. . Julian Simon, an economist who had studied the same issue, disagreed with Ehrlich's thesis. And was willing to make a bet. He suggested that they put together a basket of five commodities costing $1,000, and after 10 years, if the price went down, Erhlich was to pay him the downside difference. And if they went up, Ehrlich would get the upside difference. (In effect, it was an early derivatives trade.) . "Simon even allowed Mr Ehrlich to rig the terms in his favor: Mr Ehrlich was allowed to select the five commodities that would be yardstick." . Ehrlich consulted colleagues, and chose: Chromium, Copper, Nickel, Tin, and Tungsten. Link to comment Share on other sites More sharing options...
drbubb Posted September 6, 2013 Author Report Share Posted September 6, 2013 The Bet ended in October 1990, and Ehrlich sent Simon a check for $576.07, showing that the average price of teh five commodities had fallen by more than half. . "Although world population had increased by 800 million during the term of the wager, the five metals had dropped by more than 50.%." . Ehrlich proved to be a poor loser, and went on rubbishing those who diagreed with him. And instead of suffering some penalty for being wrong on important parts of his thesis, he gets kudos and funding from big foundations. Link to comment Share on other sites More sharing options...
drbubb Posted September 7, 2013 Author Report Share Posted September 7, 2013 Ehrlich choose the wrong 10 Years - had he realised that China's emergence would be the big catalyst, he might have waited a few decades to make The Bet Copper ... Long Term price Platinum ... LT-no lines Palladium ... LT-no lines Silver ... LT-no lines Link to comment Share on other sites More sharing options...
drbubb Posted September 7, 2013 Author Report Share Posted September 7, 2013 Erhlich probably made money on Nickel Link to comment Share on other sites More sharing options...
drbubb Posted September 7, 2013 Author Report Share Posted September 7, 2013 From 2000, Moly had a great run Like a determined tortoise, Tungsten caught up Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.