The Copper Standard
April 19, 2009 12:30 AM   Subscribe

The new monetary standard: Copper.
posted by bigmusic (49 comments total) 8 users marked this as a favorite
You fucked up. You trusted us.
posted by longsleeves at 12:48 AM on April 19, 2009

I for one welcome our new Communist copper overlords.
posted by mrt at 12:55 AM on April 19, 2009

Shouldn't this be in the "Austrian School" thread?
posted by pharm at 1:02 AM on April 19, 2009

They'll never get my penny jar.
posted by louche mustachio at 1:03 AM on April 19, 2009

RECEPTIONIST: Two gentlemen from the US Treasury to see you, sir.
PREMIER JIABAO: Show them in please.
DINO: Good morning, Premier.
PREMIER: Good morning gentlemen. Now what can I do for you.
LUIGI: (entering and flipping through Premier's documents) You've ... you've got a nice economy here, Premier.
LUIGI: We wouldn't want anything to happen to it.
DINO: What my brother means is it would be a shame if you started cashing in your Treasury bonds.
PREMIER: Well, the new China is looking at managing our risk with copper stockpiles.
DINO: Copper stockpiles! Ha ha ha.
LUIGI: Ha ha ha, very good, Premier.
DINO: Jiabao's a joker, Luigi.
LUIGI: Explain it to the Premier, Dino.
DINO: How many factories you got, Premier?
PREMIER: About five hundred thousand, altogether.
LUIGI: Five hundred thousand! Hey!
DINO: You ought to be careful, Premier.
PREMIER: We are careful, extremely careful, which is why we're looking at tangible stores of value.
DINO: But things can break, right?
DINO: We buy from your factory. If you don't make your payments it wouldn't be good for business would it, Premier?
LUIGI: Factories can, how shall I say, disappear. (puts a handful of papers in the shredder)
PREMIER: Are you threatening me?
DINO: Oh, no, no, no.
LUIGI: We're your buddies, Premier.
DINO: We want to look after you.
LUIGI: We can guarantee you no trouble in your economy if you buy another $20 billion in bonds this month.
PREMIER: No, no, no.
LUIGI: Two percent return. It's good for your people. Do you not think I'm a nice man?

posted by crapmatic at 1:22 AM on April 19, 2009 [8 favorites]

makes cents
posted by Henry C. Mabuse at 1:33 AM on April 19, 2009 [12 favorites]

I also have quite the horde of well-patinated copper disks bearing the profiles of noble visage.
posted by empyrean at 1:59 AM on April 19, 2009

Just make sure to include Silver and Gold as well as Copper.
posted by Talez at 2:23 AM on April 19, 2009

LOL copper!

Everyone knows it's all about platinum pieces these days.
posted by bardic at 2:56 AM on April 19, 2009 [2 favorites]

It's stuff like this (among other things) that has made paper money worth less than nominally equivalent coin money in argentina.. strange days.
posted by 3mendo at 3:42 AM on April 19, 2009

As a contrarian investor, I prefer to keep my wealth in electrum.
posted by Pope Guilty at 4:06 AM on April 19, 2009 [1 favorite]

I'm just hoping for a currency based on pet hair. That'll be my time to shine.
posted by A Terrible Llama at 4:07 AM on April 19, 2009 [8 favorites]

Gasoline/fuel oil, 7.62mm ammunition, bottled water, canned food, whiskey.
posted by sfts2 at 4:44 AM on April 19, 2009 [1 favorite]

I think it's funny that there's more copper in a dime than in a penny.
posted by MtDewd at 4:47 AM on April 19, 2009

I look forward to photographs of warehoused metals on a scale never before seen. Anyway, what China should be stockpiling is fresh water because once its glaciers dry up and its water table drops away it will have more pressing problems.
posted by stbalbach at 5:11 AM on April 19, 2009

China manufactures a huge amount electronics. They happen to be stockpiling metal, funny that.
posted by errspy at 5:48 AM on April 19, 2009 [1 favorite]

The trunk of gold-pressed latinum I've got buried under the porch should see me nicely through retirement, thanks.
posted by FelliniBlank at 6:00 AM on April 19, 2009

copper is perhaps the most essential raw material to modern life. the entire electrical grid depends upon it. 95% of all wire in all homes and buildings is copper. you wouldnt be able to turn your computer on without the copper wires feeding the outlet power.
posted by Flood at 6:09 AM on April 19, 2009

You'll never catch me, copper!
posted by loquacious at 6:11 AM on April 19, 2009 [1 favorite]

Never mind the electrical grid, copper is essential to all plants and animals, being required, among other things, for photosynthesis and metabolism. It also has extremely promising antimicrobial properties, including effectiveness against nasty stuff like MRSA.

Maybe I'm just fundamentally missing the point of hard money, but isn't somewhat counterproductive to take something that's fantastically useful, utterly essential, unequally distributed over the earth, and already in somewhat short supply, and start hoarding it to back currency?
posted by mayhap at 6:44 AM on April 19, 2009

The old monetary standard: Sex.
posted by clearly at 6:46 AM on April 19, 2009

Great, now all those tweaker scavenger assholes in Bumblefuck County will be nouveau riche.
posted by Inspector.Gadget at 6:58 AM on April 19, 2009 [3 favorites]

I use ones and zeros for currency.
posted by b1tr0t

Eponysterical deflation!
posted by mayhap at 7:00 AM on April 19, 2009 [1 favorite]

Aren't oil and natural gas more practical commodities for useful wealth storage than metals?
posted by Nelson at 7:23 AM on April 19, 2009

Copper IS NOT the new gold standard, this is how inaccurate memes get spread! The author (or the editor) includes copper in the title to represent the shift away from money/gold as the classic "gold standard" towards a variety of limited/hard to obtain metals, in an implicit manner much the way people these days consider oil or petrodollars to be the current "gold standard". But the idea that copper is the new gold is easier to understand or a catchier meme we so so already there are comments in both the article and this thread where people think copper is the new gold.

I was speaking to Edward Burtynsky (TED video) recently and he repeated many of the realities expounded in this article, mainly that oil isn't the only natural resource that we are quickly running out of. He specifically mentioned silver supplies being exhausted in the next 50 years and a few others I can't recall.

From an investment perspective, if you don't trust putting money into companies these days you might look to some of these resources as a more likely place to get some big returns as others wake up and begin to hoard the earth. Although, I can't help but wonder about game changers such as carbon-nanotubes, I can see them replacing copper almost entirely once mass production has been figured out and sufficient manufacturing facilities built.
posted by furtive at 8:22 AM on April 19, 2009 [3 favorites]

C h i n a just bought 1/4 of Kennecott Copper, in Utah. If you think Kennecott made a mess of the environment, before the change in ownership, just wait until the margins of Great Salt Lake, are patrolled by people in little gray suits, and notably lacking in compassion. Perhaps they will claim kinship with ancient Native American tribes, and annex Utah, for its own good.
posted by Oyéah at 8:22 AM on April 19, 2009

Aren't oil and natural gas more practical commodities for useful wealth storage than metals?

I'll use gold as an example.

First compare the price, 1 oz of gold = $900 while 1 barrel of oil = $100.

Think of how much gold you could store in the space of one barrel of oil, without the use of any special equipment besides bare hands. Think of how neatly you could stack it. Think of how you could do the same with any other metal or ore.

Now think of how little technology (pumps, compressors, environmental gear for cleanups and spills, training) is required to maintain a pile of metal. There's you're answer.
posted by furtive at 8:27 AM on April 19, 2009 [1 favorite]

While the rest of you are banking your money in less noble commodities I will stockpile air. See you all in a thousand years.

I'll be making out like a Druish Princess. Do you like my new mercedes?
posted by Severian at 8:33 AM on April 19, 2009 [1 favorite]

Currency is based upon things that are both rare and essential. Belief works until it doesn't.
When clean air and clean water are rarer than gold we may realize that currency is a blinding metaphor.
posted by weapons-grade pandemonium at 8:39 AM on April 19, 2009 [2 favorites]

The trouble with directly using anything with real value as currency is that if you want to melt something into a coin or ingot, if you want to stick something into a purse or a vault (or storage tank, Nelson), you first have to take it out of the market where it might have actually done something useful. This is an okay idea with gold, whose usefulness is limited to some low-volume electronics applications and to "ooh, shiny!" stuff. This wouldn't be too bad a (temporary) idea with oil or natural gas, which we might want to be rationing out more gradually as they run out. This is an atrocious idea with copper, which is practically the nervous system of the modern world.

Ideally anything which backed money would be something that could be "stored" for easy transfer but still used simultaneously. There are goods which sort of qualify (real estate) but I can't think of any which are commodities, another necessary characteristic.

Anyway, despite the speculation at the end of the article, I doubt the Chinese are going to try something as silly as copper money any time soon. It sounds like the only thing they're actually doing is deciding that diversifying investments into industrial metals is a safer idea than holding more US dollars right now, and at least in their case that's probably pretty smart.
posted by roystgnr at 8:41 AM on April 19, 2009 [1 favorite]

Copper stats.
posted by ZenMasterThis at 8:55 AM on April 19, 2009

It took me a moment to understand 17pc =17%. Ah, English.
posted by zenon at 9:37 AM on April 19, 2009

I heard modern currencies were all backed by unicorns so now you know what I have in my basement
posted by uandt at 10:14 AM on April 19, 2009

Good article. Very misleading FPP and title.
posted by tehloki at 10:23 AM on April 19, 2009

If you want to put your money in gold, you can buy the ETF GLD there's also one for Silver and Steel There's also DBB which holds copper, aluminum and and zinc.
posted by delmoi at 10:41 AM on April 19, 2009

I keep a bunch of Fiats in my basement.
posted by dirigibleman at 10:41 AM on April 19, 2009 [2 favorites]

Awesome graphic: How Long Will It Last? which lists how many years supply we have for any given metal. It reminds me that Burtynsky mentioned both tin ans zinc as running out in the next 40 years or so.
posted by furtive at 10:57 AM on April 19, 2009 [7 favorites]

I'm waiting for all this foolishness about copper and paper money to end, and for the world to accept the new Zoidbergian economy.

Awesome. Awesome to the max.
posted by adamdschneider at 12:24 PM on April 19, 2009

Copper, let us take you to a furnace where we'll break you.
Fire's so big and pretty, you could cry.
As a buckle, you could ask me what was wrong with me before -
did I need the silver to be suitable?
Copper, I have a use for you, it's easy work and it suits you.
Dazzled dirty beauty, you must know.
Copper is a conductor and makes for decent cooking,
dazzled by your beauty still, you know.
Plated or anodized, you even fool a layman's eyes.
Presentable though you might be, it's unwise to try to fight me.

Copper - you'll never be gold.
posted by brevator at 2:07 PM on April 19, 2009

I hope I'm not being alarmist but this really does kinda seem like a cause for concern... not that there's actually going to be a copper standard, but rather that if China did successfully shift a large portion of their financial reserves into copper and other commodities, wouldn't this give them economic leverage internationally the same way that petroleum being denominated in dollars worldwide gives leverage to the U.S.? I'm not saying "China will unstoppably conquer the world" but isn't this an at least somewhat savvy strategy that needs to be responded to, or at least accounted for, in everyone else's fiscal policy?

Also, I think it's brilliant that when the U.S. treasury stamps out our 75% copper cupronickel coins now, we'll be paying a premium for copper thanks to China's action. That's like the scene in Fight Club where they steal the bags of fat from liposuction dumpsters and use it to make boutique soaps to sell back to the liposuction patients. What do you want to bet that China will shortly stop producing the one coin their currency uses that contains copper?
posted by XMLicious at 2:27 PM on April 19, 2009

All this bespeaks a partial return to mercantilism:

Economic assets or capital, are represented by bullion (gold, silver, and trade value) held by the state, which is best increased through a positive balance of trade with other nations (exports minus imports). Mercantilism suggests that the ruling government should advance these goals by playing a protectionist role in the economy; by encouraging exports and discouraging imports, notably through the use of tariffs and subsidies.[1]

Mercantilism was the dominant school of thought throughout the early modern period (from the 16th to the 18th century). Domestically, this led to some of the first instances of significant government intervention and control over the economy, and it was during this period that much of the modern capitalist system was established. Internationally, mercantilism encouraged the many European wars of the period and fueled European imperialism.

Some people see it as a transitional stage out of feudalism. Maybe we'll use it for the reverse.
posted by jamjam at 3:14 PM on April 19, 2009 [1 favorite]

When I make my own country, the currency will be backed by Unobtainium.

Seriously, though, hoarding something =/= basing your monetary system on it. Unless I missed something in that article that makes sense.
posted by zinfandel at 4:28 PM on April 19, 2009

Bitches don't know bout my zinc.
posted by GavinR at 6:41 PM on April 19, 2009

LOL copper!

posted by ChurchHatesTucker at 8:13 PM on April 19, 2009

If we switched to an adamantium-based economy, Wolverine would be the new Jim Cramer.
posted by Strange Interlude at 8:24 PM on April 19, 2009

I wonder whether the $8Bn allocated to Obama's high-speed rail vision includes security guards to keep looters from stealing the overhead power cables.

It kinda sucks when your infrastructure is made of precious metals.
posted by acb at 8:42 AM on April 20, 2009

I keep a bunch of Fiats in my basement.

The shitty little cars, the the papal variety, or are you just talking about cash?
posted by Pollomacho at 8:55 AM on April 20, 2009

All this bespeaks a partial return to mercantilism.

But of course. Reason there was the Opium Wars was western powers trying to break China of that particular habit.

(Mercantalism habit, that is, not opium.)
posted by IndigoJones at 5:55 AM on April 21, 2009

You know if you stockpiled bricks of opium you could either become extremely wealthy after the apocalypse or starve to death not giving a rat's ass about anything.
posted by Pollomacho at 7:05 AM on April 21, 2009

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