By Icecube Enterprises
Without a doubt copper is one of mankind’s oldest and most valuable materials. Amongst metals only the use gold and iron are known to predate its use. From its origins in the middle-east to the smelting of copper in the Balkans the usefulness of copper precipitated in its independent usage around the world.
The Chinese were smelting it before 2750 BC, as were the ancient people of the Andes seven hundred years later. In short, copper has been a fundamental material in the making of tools, weapons, and art objects since the dawn of recorded history.
Not unlike it’s more precious counterparts, gold and silver, copper is a versatile and highly malleable material that has been valued throughout time for its usefulness and resistance to corrosion. We can even look to the temples and tombs of ancient Egypt for examples of its versatility and strength where 5000 year old copper tubing was found in most cases to remain intact and even functional.
Today copper’s invaluable use in industries such as telecommunications, infrastructure, transportation, and construction, just to name few, have further accentuated its usefulness in a manner that pushes demand for this precious commodity closer to supply limits than ever before in history.
With an emerging middle class in populous nations such as China and India seeking copper in an increasing residential marketplace, (read: more wiring, plumbing, and appliances), there is no denying a impending increase in the value of copper. Factor this into the rise and fall that supply and demand cyclically invokes in precious metals and one can quickly determine that investing in copper bullion can be a fantastic hedge against currency inflation, especially in light of the depreciating American dollar.
One of the best examples of copper holding its own against fiat currency can likely be found buried in your sofa cushions or lying about on the sidewalk. I’m referring to the penny, especially those minted prior to 1982, including some minted in 1982. Consider that their actual value today averages about two and a half cents. Why? Simple, they are primarily composed of copper.
This fact alone shows a direct and instant return on copper as a hedge against the inflationary US dollar. Even pennies minted after 1982, whose composition is mainly zinc and are only coated with copper, are anticipated to soon have a melt value greater than one cent as inflation builds.
The news for copper investors looks even brighter when one delves into the issue of copper supply both currently and into the future. Existent copper mines currently supplying low cost copper are expected to be depleted in the next 10 years, and expanding these mines or investing in new strikes and bringing new mining facilities online will only increase costs. Nonetheless, copper mining companies are not likely to take measures such as these anytime soon due to the volatile global markets as they currently exist. To make matters worse, many countries including Australia, will be instituting massive tax increases on new mines starting in 2012.
This, combined with a steadily decreasing quality in the copper supply from existing mines, are being cited by financial institutions such as the Royal Bank of Scotland as reasons why the copper supply will not increase with demand in next several years.
History of Copper prices on the LME, from 2003-2011.
Even those who have traditionally considered only metals such as gold, silver, and palladium to be the only worthy precious metal investments might want to think about diversifying their portfolio and taking on some amount of copper bullion when they consider the worst case scenarios involving fiat currencies.
Consider a hyper inflationary emergency scenario where paper money is useless and one need actually trade metals of real value for food or other supplies. It would then make sense to have some copper on hand as opposed to gold or silver, whose values at a time of total financial collapse are likely to be beyond the scope of local trading. In other words, try buying a loaf of bread, or a few gallons of gasoline with gold coins! Copper trading would make much better sense when bartering on this scale.
While there are a variety of ways in which one might invest in copper strategically, such as stocks and coins, copper bullion bars may just be the perfect security for those who wish to not only possess physical copper in larger quantities, but also would like to retain a potentially valuable keepsake that can be held and passed down.
There are many good reasons to consider purchasing copper bullion bars and now may be the perfect time act. Many companies are now selling beautifully stamped copper bars that are pleasure to own for their beauty alone. However, their value as an inflation hedge may very well be the best reason to stock them. Before determining how much you intend to buy consider where you’ll store them because they will take up more space then collector coinage. Also consider buying from a company that promises to buy back bullion bars such as Icecube Enterprises. It’s important to have a means to sell back your copper bullion when you wish to liquidate some of your hard copper assets for cash. So, always be on the lookout for a market and keep track of the current value of copper at sites like Kitco.com.
All in all, copper is an inexpensive and strategic investment when planning to stave off inflation and the mid to long term outlook appears to show more than modest gains for the copper investor. There are some financial experts with a bearish view of copper markets in the future who claim that as copper prices rise then less demand will cause copper prices to fall back into place. However, it doesn’t take a genius to see that any investment one makes in strategic metals will at the very least hold its value against a fiat dollar that by every indication will show a drastic depreciation in the near future.
In terms of investments copper might not seem as exciting as the latest technology stock or indeed gold or silver, but in terms of financially expedient measures one can take to as a hedge against inflation the red metal is shining brighter all the time.
Icecube Enterprises is proud to now offer its own beautifully stamped 1lb .999 Fine Copper Bullion Bars for investors and collectors alike at fantastic prices with buyback options you can depend on. Please visit our Copper Bullion Bars page for more information.
