No Diamond-Water Paradox on 55 Cancri e

From Yahoo.com:

The alien planet, a so-called “super-Earth,” is called 55 Cancri e and was discovered in 2004 around a nearby star in our Milky Way galaxy. After estimating the planet’s mass and radius, and studying its host star’s composition, scientists now say the rocky world is composed mainly of carbon (in the form of diamond and graphite), as well as iron, silicon carbide, and potentially silicates.

At least a third of the planet’s mass is likely pure diamond. . . .

Previous studies of this planet suggested it might actually be covered with oozing “supercritical fluids” — high-pressure liquid-like gases — seeping out from its rocks. But this idea was based on the assumption that 55 Cancri e had a similar chemical makeup as Earth, Madhusudhan said. The new findings suggest the planet has no water at all.

Closer to home, there is a new diamond discovery on earth (also from Yahoo.com)

Call it the Soviet Union’s most valuable cold war secret. This past weekend, Russia declassified the existence of what could very well be the richest diamond field in existence, located in the depths of a 62-mile diameter asteroid crater known as Popigai Astroblem in Siberia.

The diamonds found in the Popigai Astroblem are known as “impact diamonds.” They’re created when a meteor strikes a graphite deposit, as happened there an estimated 35 million years ago. Impact diamonds are significantly harder than normal diamonds, and are best suited for industrial or scientific use.

Given that diamonds can sell for $2,000 per karat with unusually large diamonds going for as much as $20 million, a discovery of “trillions of karats” could value this hole in the quadrillions of dollars. Of course, a diamond discovery of this magnitude is almost sure to have a serious downward impact in the per-karat price should full-scale mining operations ever begin.

Here’s some advice; unless they are talking in terms of Zimbabwe money, your should be skeptical anytime you hear the phrase “worth a quadrillion dollars.”  That would make the mine worth more than all the wealth on planet Earth.  But it’s an interesting question for a grad economics exam; what’s the optimal rate of extraction?  I presume that if diamond demand depends on the expected rate of future extraction, it becomes one of those unsolvable game theory problems.

The fact that diamond prices haven’t already plunged makes me skeptical of the veracity of this story.

PS.  I wonder if the universe contains any planets made of cubic zirconia.

About Scott Sumner 492 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

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