(COPPER AND THE GREEN ENERGY REVOLUTION)

June 14, 2023

Hello everyone,

Today I thought I would venture into the world of copper, look at a bit of history, and understand why it is so valuable today, what we use it for and why there may be an impending shortage in the future.

Copper has played a big role in the world economy for thousands of years.

In the Bronze Age, blacksmiths worked out how to forge copper and tin.  The continual refinement of copper, both in its combination with other metals and the extraction process, transformed the world by improving tools, construction, and weaponry.

The Middle Ages and the Age of Discovery saw copper applied in new and exciting ways.  Copper became a part of artistic expressions in Renaissance canvases and sculptures and later in styles such as daguerreotype photography. (For those who don’t know, daguerreotype was the first commercially successful photographic process (1839 – 1860) in the history of photography.  The daguerreotype is a direct-positive process, creating a highly detailed image on a sheet of copper plated with a thin coat of silver without the use of a negative.)   Copper has also played a large role in international relations and affairs.  It lined the hulls of Christopher Columbus’s seafaring fleet to prevent the ships from sustaining damage from salt water and biological agents.  Furthermore, the Statue of Liberty, France’s gift to the fledging United States, incorporates more than 200,000 pounds of copper (but her green tint comes from years of oxidation).

One of the most significant moments in copper history occurred in 1977, when technology giant IBM adopted oxidized copper interconnects, replacing the aluminum standard.  The result was fast, smaller, and thinner computers and gadgetry due to copper’s malleability and ability to conduct electricity with 40% less resistance than aluminum.

So, we find that copper is used in electrical and heating equipment because its chemical properties make it such a useful conductor.  Today it is used in car motors, household pipes, washing machines, all sorts of things we use every day.  Furthermore, we can’t forget to mention all the different copper alloys that are mixed into other metals and items.  Significantly, the metal is so easily recyclable that most of the copper on earth remains in the ground.  In fact, only 12% of all copper on Earth has been mined throughout history and nearly all of it remains in circulation.

Some of the copper in circulation right now could once have been jewelry or armor in ancient Egypt.  In fact, the International Copper Association estimates that an incredible 75% of the copper produced since 1900 is still in use.    

In May 2021, analysts at Goldman Sachs called copper “the new oil.”

So, why are some people, including commodity analysts at Goldman Sachs warning about a copper shortage with dire consequences for the economy?

In short, it is about the mining and recycling infrastructure being unable to meet the potential demand from these industries.

In May 2021, leading on from “the new oil” comment, analysts at Goldman Sachs suggested that copper could rise in value in the next few years from $9,000/ton to $20,000/ton.

With this in mind, we need to position now for long-term demand in green technology. I’m not saying this rise is going to happen next year, but it will in the next 5-7 years.

People are just starting to realize the magnitude of copper’s presence throughout the economy.

Mind you, we call it Dr. Copper because we see it as having a Ph.D. in economics.  When economic activity increases demand for copper increases and copper prices rise.  In that sense, the copper market becomes a barometer for global economic growth – a leading indicator.

But Dr. Copper does not always provide a certain diagnosis.  Sometimes, the connection between copper prices and economic growth breaks down.

Copper is important for a lot of local economies as well.  You may be wondering where it comes from.

In the last 50 years, South America has become important.  Peru and Chile really dominate.  Arizona is the leading copper producer in the U.S.  Zambia in Africa has a significant copper belt.  There is also a large mine in Mongolia. 

The copper industry is bracing for a boom in demand.  Governments and companies around the world are preparing for a green energy revolution.  We will witness entire new power grids using solar, wind and water to power turbines and feed electricity into copper wires.  What’s more, EVs need much more copper than their gas-powered counterparts.  Take a look at the graph here and compare the quantity of copper used in each vehicle.

There is basically three and a half times more copper in EVs than in gas-powered cars.  You need to account for the motors in the batteries – more electronics.

Solar has a similar story. With conventional energy, we normally would use one metric ton of copper per megawatt of generating capacity.  When you look at renewable energies, you are looking at four to six times that amount of copper.

Solar installation could be something like 9,000 lbs/megawatt.

Wind farms could be as much as 15 million lbs. of copper.

In individual wind turbines, there would be about 800 lbs. of copper.

So, as we move to a decarbonized economy, we are basically replacing C in the periodic table with CU.

Higher copper prices may have a silver lining.  It will cause mining companies to break ground on more new projects since extracting copper will have a bigger payoff. There’s also new technology springing up to extract copper.  For more information there, investigate Jetti Resources.  This company is now able to extract copper from low-grade material – that is, material that was once dumped in the rubbish.

It's interesting to note that 65% of all unearthed copper is used by the electronics industry.

The global copper market reached USD 241780 million in 2021-2022.  This market is expected to reach the value of USD 343900 million by the end of 2030.

Start positioning for the future growth of this market.

The life cycle of copper is infinite

Environmental benefits of secondary copper from primary copper

Wishing you all a great week.

Cheers,

Jacquie

Mad Hedge Jacquie’s Post

(QUANTUM COMPUTING AND CYBERSECURITY)

June 9, 2023

Hello everybody.

Do you have security on your laptop? Do you ever worry about your information being stolen?
Encryption on our computers keeps our information safe for now. However, the impact of
quantum computing on cybersecurity is game-changing.

Quantum computing holds great promise in many areas, such as medical research, artificial intelligence, weather forecasting, etc. But it also poses a significant threat to cybersecurity, to the extent that it will require a change in how we encrypt our data. Even though quantum computers don’t technically have the power to break most of our current forms of encryption yet, we need to stay ahead of the threat and come up with quantum-proof solutions now. If we wait until those powerful quantum computers start breaking our encryption, it will be too late.

Security of our information is paramount. The only way to ensure the security of information, particularly information that needs to remain secure well into the future, is to safeguard it now with quantum-safe key delivery.
The potential of quantum computing is far beyond the average person’s imagination. Quantum computers will be able to solve problems that are far too complex for classical computers to figure out. I mean, can the average person figure out the computers we have now?
Quantum computers (QC) will be able to solve the algorithms behind encryption keys that protect our data and the internet’s infrastructure. That really sounds scary and very futuristic. So, will anything be safe online?

Today’s encryption is based on mathematical formulas that would take today’s computers an impractically long time to decode. To simply do this, think of two large numbers, for example, and multiply them together, it’s easy to come up with the product, but much harder to start with the large number and factor it into its two prime numbers. A quantum computer, however, can easily factor those numbers and break the code.

Today’s RSA encryption, a widely used form of encryption, particularly for sending sensitive data over the internet, is based on 2048-bit numbers. Experts estimate that a quantum computer would need to be as large as 70 million qubits to break that encryption. Considering the largest quantum computer today is IBM’s 53-qubit quantum computer, it could be a long time before we’re breaking that encryption.

As the pace of quantum research continues to accelerate, though, the development of such a computer within the next 3-5 years cannot be discounted. For instance, earlier this year, Google and KTH Royal Institute of Technology in Sweden reportedly found “a more efficient way for quantum computers to perform the code-breaking calculations, reducing the resources they require by orders of magnitude.” Their work, highlighted in the MIT Technology Review, showed that a 20 million-qubit computer could break a 2048-bit number – in a mere 8 hours. What that shows, is that continued breakthroughs like this will keep pushing the timeline up.

The greatest risk is the vulnerability of information that needs to retain its secrecy well into the future, such as national security-level data, banking data, privacy act data, etc. Those are the kind of secrets that really need to be protected with quantum-proof encryption now, particularly in the face of corrupt individuals/groups, who are stealing it while they wait for a quantum computer that can break the encryption.

Researchers have been working hard in the last several years to develop “quantum-safe” encryption. One thing is for certain, however, when it comes to the impact of quantum computing on cybersecurity, it will pose a threat to cybersecurity and our current forms of encryption. To mitigate the threat, we need to change how we keep our data secure and start doing it now. We need to approach the quantum threat as we do other security vulnerabilities: by using defence-in-depth approach, one characterised by multiple layers of quantum-safe protection. Security organisations focused on the future understand this need for crypto agility and are seeking crypto-diverse solutions like those offered by QantumXchange to make their encryption quantum-safe now, and quantum-ready for tomorrow’s threats.

We can’t afford to let our guard down in this critical area. The good actors need to outpace the bad actors in this space and make sure our security measures are impenetrable.

Wishing you all a great weekend.

Cheers,
Jacquie

Quantum computing and cybersecurity

White House launches plan to safeguard US infrastructure against quantum computing.

Hacking activity – we need to outsmart the bad actors first.

Difference between Classical computing and Quantum Computing

The mystery of quantum computers.

June 7, 2023

Hello everybody.

We all know how important water is. To begin with, we as human beings, consist of 55-60% water. We are always told to drink more water to maintain better health.

What we might not fully realize is the significance of water, not only for ourselves, but also for our ecosystem, our economy, and our planet.

We can benefit physically and financially by investing in it.

But how do we invest in water?

Water is already traded on the financial markets, but does it make sense for you to invest in this resource?

Let’s see…

Water is a commodity, like gold, oil, wheat, or sugar.

So, it can be traded and like other commodities, the price can fluctuate depending on supply and demand. Research shows that the supply of water could begin to decrease in the next decade, which means demand will increase exponentially.

And what will that mean?

You guessed it.

The price of water goes up.

And the water crisis keeps getting worse.

So, what can you do?

You can invest in companies that deal with recycling water and water efficiency.

One managed fund is the Pictet Clean Water Fund – where you can profit from water as an investment opportunity.

OK, we all know how supply and demand works, - Economics 101.

For example, if there is a drought and there is a low wheat harvest due to drought or extreme weather events, the supply goes down. In the economy, in general, there will be more demand, than supply which makes the price go up. As water is a commodity, we can see the same thing. There are supply and demand issues here as well.

Let’s ask a critical question?

How much water do we have on Earth?

And can we meet the demand without major problems?

We must wrap our heads around the fact that only 3% of the water on the planet is freshwater – which humans can consume. The rest of it, 97% is too salty to drink or to use for agriculture.
Glaciers hold around 2.5% of freshwater, which is inaccessible to humans.

So, when you think about it, there is not that much water available.

And, like it or not, climate change, is threatening our supply.

How?

Extreme weather events – which are increasing – are threatening the availability of cleanliness of water.

Rising sea levels impact the supply of fresh water. As ocean levels rise, freshwater becomes salty water.

The impact…

Water prices will rise in the future as less supply = higher prices.

As the world population grows to almost 10 billion in 2050 and the increased wealth of that population demands far more luxury foods, such as meat, the value of water will be highlighted.

Consider that it takes 15,415 litres/1 kg = a single T-bone steak.

So, you are looking at two Olympic swimming pools to produce the meat from just one cow.

Or think about your cup of coffee. For 1kg of coffee beans, you need 18,900 litres of water.

As more and more people become part of the middle class in countries such as China and India, you can begin to imagine the demands on water, as a resource.

Agriculture and food take up 69% of the world’s water resources now.

Scarcity will make water more valuable.

England has announced that by 2050 domestic demand could exceed supply by up to 3.1 billion litres/day.

NASA has discovered that 21 out of 37 of the world’s aquifers are currently being depleted.
Other freshwater sources are being polluted.

The Chinese government admits that 80% of the country’s surface groundwater is not fit for drinking, while 90% of groundwater in urban areas is contaminated and 40% of its rivers are too polluted to use for either agricultural or industrial use.

By 2025, it’s estimated that 66% of the world will live in water-stressed areas according to the World Resources Institute.

A 40% gap between supply and demand will emerge over the next 15 years.

Water has always been important. Even Dwight Eisenhower remarked that “among these treasures of our land is water, fast becoming our most valuable, most prized, most critical resource.”

Opportunities and Solutions

Exploration - helps uncover new aquifers and sources of water.

Efficient wastewater management.

The Middle East is choosing new purification technologies, such as graphene desalination, a process that turns deserts into irrigated farmland.

Aeroponic indoor farming uses 90% less water.

Smart metres to know how much water we are using.

Upgrade existing infrastructure networks – ease water loss and improve delivery.

Invest in water-rich farmland (which is Michael Burry’s (of “The Big Short”) way of investing in water. He says that it became “clear to me that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas.”

Research by Trucost suggests that more than half of the profits of the world’s biggest companies would be at risk if water was priced to reflect its true value.

Microsoft is one company that is aware of this issue. It is experimenting with putting its data centres beneath the ocean (to cool naturally).

The WHO has estimated that the economic returns of every $1.00 invested in water and sanitation is $4.50.

Individual shares, ETFs, and mutual funds are ways you can invest in this resource.

Have a look at (PHO), Invesco Water Resources ETF. On the weekly chart, it presents an inverted head and shoulders pattern, which should soon break to the upside.
Both John Thomas and I are expecting the commodities sector to be strong in the second half of the year and into next year.

Top 9 Holdings of (PHO)

Name:
American Water Works (AWK) 4.25%
A.O Smith Corp (AOS) 4.19%
Pentair PLC (PNR) 4.18%
Evoqua Water Technologies Corp (AQUA) 4.10%
Roper Technologies Inc (ROP) 8.52%
Ecolab Inc (ECL) 8.48%
Xylem Inc (XYL) 8.15%
Waters Corp (WAT) 3.89%
Danaher Corp (DHR) 7.71%

Investing in water is something to be seriously considered, with a long-term view to the future in mind.

Have a great week.

Cheers,

Jacquie

World Water Crisis – the World needs to wake up.

Friday, March 22^nd, 2024.