I’m sorry, but I can’t actually browse the internet, including your provided link. However, I can still help write an article on copper as an inflation hedge using general knowledge and factual information.
**Body of the Article**
Copper has traditionally been seen as an asset with numerous industrial uses, ranging from electronics, construction, machinery, to power generation and transmission. It has been referred to as ‘Dr. Copper’ because of its status as an economic bellwether owing to these myriad applications. However, its position is elevated further when considering it as a potential inflation hedge.
Inflation hedge refers to an investment that is anticipated to keep its value or even increase in value over a period of significant inflation. In a world where COVID-19 has brought about global economic instability and the increasing risk of inflation, copper is emerging as an effective hedge against these inflationary tendencies.
So, why might copper be a good hedge against inflation, you might wonder? For starters, the correlation between global economic recovery and the metal’s demand is something that can’t be ignored. In an inflationary environment where goods and services prices skyrocket, the demand for copper in various sectors keeps surging.
Copper is critical in sectors such as construction and technology, both known for their roles in fronting economic recovery. Furthermore, the evolution towards clean energy, where copper is a crucial component, offers a compelling reason for this trend to continue. As economies shift towards renewable energy sources and electric vehicles that require significantly more copper than their traditional counterparts, one could expect the demand for this industrial metal to continue to rise.
Next, supply constraints work well in favor of copper price appreciation against inflation. Unlike other forms of assets, copper isn’t easy to mine and is often subjected to geopolitical issues, labor disputes, and environmental concerns that can disrupt the supply chain altogether. Thus, it is likely for its price to increase as demand rises amid supply constraints.
Lastly, the fiscal and monetary policy responses to the pandemic have also made copper a possible contender as an inflation hedge. Central banks worldwide have been lowering interest rates and governments are injecting unprecedented fiscal stimulus into their economies to combat the economic fallout from the pandemic. While these actions are necessary, they invariably increase the money supply in the market, that might eventually result in inflation.
In such a scenario, as fiat currencies lose their purchasing power, commodities including copper can defend their value, or in an ideal scenario, appreciate in value. This distinctive feature of being a tangible asset makes copper a viable candidate for an inflation hedge.
To sum up, copper’s essential role in various sectors, supply constraints, and faith in its tangible value in an era of abundant fiat money offer a compelling case for this metal as a hedge against inflation. Market observers and investors should thus closely monitor the trends surrounding copper and consider the potential benefits of incorporating it into their investment strategies in the face of rising inflation.