Good Copper ArticleThe case for copper: A port in the coming storm Republish Reprint MidasLetter | September 13, 2016 | Last Updated: Sep 13 12:20 PM ET More from MidasLetter . Copper is historically always the third commodity to experience a rush of interest, after gold and silver have reached overbought conditions Bartek Sadowski/BloombergCopper is historically always the third commodity to experience a rush of interest, after gold and silver have reached overbought conditions. Twitter Google+ LinkedIn Email Typo? More . While monetary metals prices ping pong back and forth between $1,320 and $1,370 in the dying gasps of futures market mal-regulation, it is worth considering the future supply and demand metrics for that most electric of metals copper. While Im sure you may have heard the banging on the drum by various mining promoters in support of the idea of a return to copper prices above US$4 a pound, the reality is that the metals rally that has put both gold and silver back into favour with investors has yet to do so for copper. The next year is likely to see an exponential amplification of negative-yielding (or I should say money-losing) sovereign debt. There is also a newer phenomenon of private non-financial issuers selling negative-yielding, money losing debt. It is also quite certain that world economic growth will suffer downward revisions, which will catalyze an expansion of quantitative easing. In that the globalized financial system knows no borders when it comes to the flows of investment capital, the expanded leverage of bank balance sheets that quantitative easing engenders is the explanation for why stock markets are flying while the economy is on its knees. Related Gold price to reach new heights on increased global stimulus, negative rates Podcast: Brazil Resources Amir Adnani on gold, copper . In this upside down, though totally unsustainable fantasyland, sober-minded investors should be considering what happens when a globalized monetary system so over-leveraged is no longer capable of convincing the public that the currency in their wallets will be honoured at face value. In the absence of any trusted medium of exchange that exists exclusively in electronic or paper form, it is commodities whose value is intrinsic that will become the most sought-after stores of value. Never mind hedge against inflation, as the mantra has uniformly been for gold. Any port in a storm, comes to mind as the most appropriate aphorism to be applied. Gold and silver the obvious, front line beneficiaries in such a scenario will catapult to new heights in prices never before seen, as the artificial money that now suffocates economic growth is unwound and debased into worthlessness. Advertisement . But copper is historically always the third commodity to experience a rush of interest, after gold and silver have reached overbought conditions, and those who succeed in the early phase of a renewed interest in precious metals seek to diversify their holdings within the same asset category. Right now, demand metrics for copper, relative to the supply outlook, suggest that not only will copper prices rise as global capital pools demand greater exposure to hard assets, but the evolution of both motive and stationary power away from hydrocarbon-based toward renewable electric will provide an extra degree of impetus to upward price pressures. Wind turbines, which currently account for approximately five per cent of the electrical generation capacity of Canada, for example, can contain up to three tonnes of copper per unit. By 2025, it is expected that wind turbines will contribute over 20 per cent of the electrical energy mix in Canada, which implies a four-fold increase in copper consumption for wind turbines alone, in Canada. In May 2016, the latest period for which such data is available, the International Copper Study Group released figures relating to the balance of supply and demand against global copper inventories. The ICSG concluded that, The refined copper balance for the first five months of 2016, including revisions to data previously presented, indicates a production deficit of around 222,000 t (and a seasonally adjusted deficit of about 181,000 t). This compares with a production deficit of around 39,000 t (a seasonally adjusted surplus of about 10,000 t) for the same period of 2015. Thus, while the argument for precious metals in the immediate term is strong, the argument for copper investment in the long term is better. Investors known for prescient bets at the earliest stages are already moving into copper producers and explorers, as is evident in the recent price movements of some of those stocks. James West is an investor and the author of the Midas Letter, an investing research report focused on Canadian markets. The views expressed here are his own and are presented for general informational purposes only they should not be construed as advice to invest in any securities mentioned. James West and/or associated funds do not own shares in any securities mentioned in this article. For the full Midas Letter disclosure policy, click here. Postmedia and Midas Letter have a revenue sharing arrangement.