I’m sure most readers of this blog are familiar with Julian Simon’s wager with Paul “The Population Bomb” Ehrlich. For those who don’t know, Simon let Ehrich pick any five metals in 1980, and he bet that a basket of them would be cheaper (after adjusting for inflation) in 1990. Simon easily won, and Ehrlich’s boasts at the time of the wager are funny (assuming this website is accurate).
While doing some research on futures markets, it occurred to me that perhaps Simon wasn’t so “prescient” after all. Does anybody know what the futures prices of these metals were back in 1980? Specifically, could Simon have hedged his bet so that he made money no matter what happened?
