Copper, Bikini Economics, And An Early Warning

“My hemoglobin is based on copper, not iron.” – Star Trek, TOS

Why didn’t they let the clown make iron?  He smelt funny.

The current economic mess we’re in has often been discussed by economists.  Let’s look at the word economist so we can understand what that word really means.  Eco comes from the Greek “echo” meaning repeating sound and the Serbo-Croatian word “myst” meaning where gorillas hang out, therefore it means a bunch of gorillas repeating the same thing back and forth to each other on PBS® until it’s time for bacon-wrapped shrimp and cocktails at the faculty lounge.

Likewise, the economy has been hit by what the “economists” call an exogenous shock.

Okay, what’s exogenous?  I could give another silly definition involving the X-Men® and confused gender identity, but exogenous really means coming from outside.  In this case, it’s the current mess in Ukraine, and, most particularly, the sanctions that were put in place.

Typically, I’ve noticed that when people want to punish someone, the idea would be to pick something that would be negative for that person.  But, once again, Biden has managed to play Brer Fox to and thrown Brer Rabbit straight into the briar patch – Russian income is up compared to previously.  Normally when you punish someone, bad things happen to them.

Oops.

I could probably round up a group of drunken fraternity juniors at any college that still taught stuff (sorry Harvard®, sit down) what could over a round of beer pong come up with better sanctions than Biden and his staff threw together.  And at the worst case, they’d come up with sanctions that were silly yet didn’t hurt the United States.  I mean, Putin doesn’t really have hair, so we’ll have to table Chet’s idea to give him a swirlie.  Besides, Chet is passed out now and Brad has a Sharpie® out.

What do you call someone kicked out of a frat?  A has-bro.

It started predictably enough – the energy sanctions have already caused a fill-up event to cost so much that it gives the Lefties goosebumps.  This is wonderful in their eyes.  Why?  It causes less use of pesky gasoline and electricity.  Their ultimate goal is to create an economy that produces no carbon dioxide at all, being run entirely by $80,000 electric vehicles to take Leftists from the Starbucks® to their Pilates lessons.

How far are they willing to go?  The Dutch have implemented a plan that requires their farmers to reduce their number of cattle by 30% by 2030.  So, less of whatever the Dutch make out of milk.  I wonder if they’ll take the same stance with gasoline?  If so, how will Vincent’s Van Gogh?

Vincent’s Van won’t Gogh.  And since the economy can’t work on good climate intentions something will have to break.

Vincent did some karaoke – he liked to sing blues.  One Bourbon, One Scotch, and One Ear.

Something to break?  Let’s talk about the price of copper.

Copper is a very good conductor of electricity.  It’s also a metal that is in demand when an economy is growing.  Why?  Copper goes in wire for houses – 43% of copper is used in building and construction.  Copper goes in computers – 20% is used in electronics.  Add in another 20% for cars and such – and that takes us over 80%.  I’d bore you with more facts about copper, but it makes me break out in hives – I guess I have a metallurgy.

I went to Steve Jobs’ funeral, just to ask this:  “Who is thinking outside the box now, Steve?”

Regardless, let’s look at what happens to the price of copper when the economy is overheating – in 2006, you can see the price of copper (from Macrotrends, LINK) shot up.  Interest rates were low, and houses were being built on every flat piece of ground from San Diego to Orlando.

That was the result of an economy that was overheated.  Copper popped up in price, and then collapsed.

Copper does that – and it leads.  When interest rates were low and anyone who could fog a mirror could get a loan, then copper prices shot up back in 2006.  As long as the boom held out, copper held out.  When the market for houses finally collapsed, so did the price of copper.

So, that’s the history.

What about 2022?

It started with a spike.  Why?  Low interest rates and easy money made it so the housing market, even in sleepy little Modern Mayberry was hot.  When I bought my house, there were houses that had been on the market for over 300 days.  Three months ago, a house hit the market on Friday and was gone by Monday.

Now, I’m thinking it won’t be nearly so easy to sell in a small market.  And copper indicates that it’s likely that construction demand is dropping.  Not only that, but China, typically a big market for copper, cut its demand for scrap copper in the past week by 47% (according to the one source in broken English I could find).  So, it’s no big surprise that copper prices are down over 20% since March.

So, I’m not sure Biden can sanction Russia any harder unless he comes to our houses individually, breaks our windows, impregnates our dogs, and sticks his thumb in the butter in the fridge.

Oh, crap.  You don’t think I gave him ideas, do you?

Author: John

Nobel-Prize Winning, MacArthur Genius Grant Near Recipient writing to you regularly about Fitness, Wealth, and Wisdom - How to be happy and how to be healthy. Oh, and rich.

25 thoughts on “Copper, Bikini Economics, And An Early Warning”

  1. They don’t call it Dr. Copper…

    https://www.investopedia.com/terms/d/doctor-copper.asp

    …for nuthin.

    https://www.marketwatch.com/story/with-prices-skirting-a-17-month-low-dr-coppers-prognosis-about-the-global-economy-is-downbeat-11656933741

    It’s a great bikini color, too.

    https://www.google.com/search?q=copper+bikini&sxsrf=ALiCzsaTFYptoxXXrxxKghwOyi3CTZKNcw:1657109276833&source=lnms&tbm=isch&sa=X&ved=2ahUKEwj0rbKOneT4AhXkmGoFHUNECLUQ_AUoAnoECAEQBA&biw=2195&bih=1102&dpr=1.75

    1. Yup – copper is a winner. But that bikini can’t cover some of the shorts that are going to blow up . . .

  2. Your first paragraph has to be the best definition of an economist ever! Brace for impact folks as the idiots at the flight controls are flying our economy into the side of a mountain. Not looking forward to cleaning up the wreckage, but somebody has to do it.

    I continue to advise my clients to invest in canned goods and shotguns!

    1. Canned goods and shotguns? Good advice. Canned goods and shotguns and rifles and ammunition and scotch? Better.

  3. So, I’m not sure Biden can sanction Russia any harder unless he comes to our houses individually, breaks our windows, impregnates our dogs, and takes sticks his thumb in the butter in the fridge.
    Its a great idea, but maybe the grammar needs a check.

  4. Dr Copper is always right, unlike Dr Jill. In all seriousness, I log 600-800 miles weekly, and there’s sporadic traffic these days compared to 3-4 months ago. Remembering the early 80s well, everything just died during 82-83 when gas was $1.20/gal. Within 2 years crude dropped to $10/BBL (10÷42=24¢/gal), and gas was 60¢/gal.

    Rinse & repeat, inflation then deflation, which has Mr Powell having nightmares.

    1. The deflation will spread. Already hitting land around here. And I’m ready to buy . . .

  5. Hello, We are witnessing the controlled demolition of our country, yet keeping in mind,
    there are plenty of wild cards in the deck, that are not so controlled.

    1. Suzanna – on the nose. I never expected to relive the 1920’s and 1930’s, but in Germany . . .

  6. You can stockpile canned goods to get you through a supply shock, but long-term preparation means building healthy soil: fertility, and moisture-holding capacity. And, in my case, sifting the rocks and gravel out of the sand and clay, down at least 18″, and digging in leaves and windfall sticks (which become little water-sponges as the rot).

    1. If you have gravel soil like we have in NH a raised bed is best. Filling the bottom third with fallen tree branches saves the quality compost soil mix and as Lathechuck said makes a nice wooden sponge to help with drainage and store some of it for later.

      It’s called Hügelkultur if you want to look it up. Same idea that makes woods so resilient in drought conditions.

      Bad news is every 3-4 years you get to dig up the sunken beds and replace the wood. But it works great for me, when others are frantically pumping water into their gardens, I have a decent reserve for several weeks.

      BTW don’t use toxic woods like treated lumber (Yes, I was told of a neighbor that did that, so proud he got “Rid” of that toxic waste) and don’t use allopathic woods like black walnut and oak.

    2. The Mrs. and her brother inherited quite a bit of deep soil, enough to feed hundreds. Now? We need to buy some cattle. Probably should fix the fence first . . .

    3. The Mrs. and her brother inherited quite a bit of deep soil, enough to feed hundreds. Now? We need to buy some cattle. Probably should fix the fence first . . .

  7. But, but, but, muh faculty lounge has the magic soil and diversity is our readiness in order to burn it all down better during WWIII against enemies who have prepared for WAR.
    Will the Karenocracy be able to handle mass body bags or an aircraft carrier group that never returns?
    Ol’ Whitey is not welcome so the historic 1000 years of glorious victories are etched on Play-Doh tablets.
    All a feature and not a bug to the duped (?) useless idiot faculty lounge Long March true believers.
    Maybe Hillary could bring a Staples dollar bin button or a light switch for the Great Reset Leap Forward or dizzy ditzy Lizzie Cheney could be the preezy of the steezy of the SmartMatic Dominion just to piss her off.

    1. *The* Lawdog? I’d love to help . . . but I’m not sure he even knows me. What’s his new place???

  10. It strikes me that the break of a copper wire and its inability to replace it was the turning point in Atlas Shrugged.

    The sanctions are a perfect example of the reactionary “need to do something” rather than “the need to do something useful”. The two are not the same.

    1. Ya. If they wanted to actually hurt Russia, they should have picked something else . . .

      1. “ You don’t think I gave him ideas, do you?”

        Hide your dog, and your butter, but not in the same place.

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