We're About to Run Out of Copper
Gold and silver are exploding. But the real problem is copper—and the math is terrifying.
Gold just crossed $5,000 an ounce. Silver hit $100 for the first time ever. The headlines write themselves: debasement trade, dollar weakness, flight to safety.
But the more I followed the excitement, the more I kept getting stuck on a different number. A number that doesn’t fit into the usual market narratives, because it isn’t really a market narrative at all. It’s a physical one.
We consume 30 million tons of copper a year, and only 4 million tons of that is recycled. And when you run the growth math forward, something unsettling falls out: to maintain 3% global GDP growth over the next 18 years, without any additional electrification, without data centers, without solar panels, without wind farms, without EVs, without any of the green buildout, we’d have to mine the same amount of copper in the next 18 years as humanity mined in the previous 10,000 years.
That’s not a trade thesis, just plain arithmetic.
The precious metals surge is the visible symptom everyone’s watching. But the underlying constraint is physical and mathematical, not just monetary. Once I saw the copper math, everything else started to look like a shadow on the wall: tariffs, rhetoric, even the bond market drama. The real story is that the modern growth model is colliding with the periodic table.
And then it gets worse, because the constraint isn’t only about what’s in the ground. It’s also about who controls the chokepoints between ore and usable metal.
The Debasement Trade on Fire
The first thing you notice in January 2026 is that the “tail risks” stopped behaving like tails.
Gold is above $5,000 an ounce. Silver printed above $100. And the gold-silver ratio hit 50:1, a level it hadn’t touched in 14 years, a sign that this isn’t just a single-metal story or a quirky retail squeeze. It’s a broad repricing of monetary metals happening in real time, with enough force to drag old relationships back into view.
At the same time, copper is pressing near record territory, the kind of price action that usually gets explained away as “China reopening,” “inventory cycles,” or “speculative froth.” But copper doesn’t move like a meme. It moves like a nervous system. When it starts screaming, something structural is often happening underneath.
The currency backdrop is doing its part. Peter Schiff, chief economist at Euro Pacific Capital and a longtime gold advocate, captured the prevailing narrative in a single post:
“The Dollar Index is breaking down, trading at its lowest level since October. The dollar is within half a percent of hitting a new record low against the Swiss franc. Renewed dollar weakness will only fuel rallies in precious metals and other commodities and pressure bonds lower.”
Schiff is not a neutral observer. He’s been early, loud, and often right about the direction of the argument even when the timing didn’t cooperate. But what matters here is that his framing is now mainstream enough to feel obvious: a softer dollar tends to lift commodity prices, and rising commodity prices tend to pressure bonds.
What made this moment feel different to me wasn’t the existence of the debasement narrative. It was the institutional behavior starting to rhyme with it.
India’s holdings of U.S. Treasuries fell to $174 billion, a five-year low, according to Angel One’s reporting on the shift in reserves. On its own, that could be portfolio management, liquidity needs, or a tactical adjustment. In context, it looks like part of a broader pattern: large pools of capital incrementally reducing exposure to dollar-denominated paper while hard assets reassert themselves.
And then there’s Europe. Denmark’s AkademikerPension announced plans to divest $100 million in U.S. Treasuries by the end of January 2026. A small number in the global bond market, but a loud signal in institutional culture. Pension funds don’t like drama. When they choose to make a point, it’s usually because they think the point is already obvious.
This was supposed to be a year-end story. Instead, it’s happening in the third week of January, with prices already at levels that would have sounded like satire a year ago.
The temptation is to stop here and declare victory for the debasement trade: the dollar is weak, bonds are under pressure, gold and silver are repricing, institutions are moving.
But that explanation, while real, misses something bigger happening in the physical world.
Because even if the dollar stabilized tomorrow, the copper math would still be waiting.
The Impossible Copper Math
When I started pulling on the copper thread, I expected to find the usual suspects: inventories, mine disruptions, speculative positioning, maybe a cyclical surge in demand. Instead, I ran into a wall of arithmetic.
A widely circulated mining industry analysis put the core problem in blunt terms, and it’s one of those statements that’s so extreme you almost want it to be wrong, just so the world stays normal:
“Copper is in the tightest position, well, frankly, I’ve ever even studied. We’re consuming 30 million tons of copper a year, only 4 million tons of which is recycled. That means to maintain 3% GDP growth, now listen carefully, with no electrification. This is with burning oil and gas. To maintain global 3% GDP growth, we have to mine the same amount of copper in the next 18 years as we mined in the last 10,000 years.”
I kept rereading it because it doesn’t sound like a market call. It sounds like a stress test for civilization.
Start with the base numbers. 30 million tons consumed annually. 4 million recycled. That means the world is still overwhelmingly dependent on primary extraction. Recycling helps, but it’s not remotely close to closing the loop. The system is linear: dig, refine, build, discard. Copper lasts a long time in infrastructure, which is good for society, but it also means scrap supply doesn’t magically ramp with demand.
Then the growth overlay. The quote’s key move is to strip out the green transition entirely. No EV boom. No solar buildout. No data center explosion. Just the baseline requirement to keep global GDP compounding at 3%.
That’s why the number is so disturbing. It’s not saying “the energy transition will be hard.” It’s saying “even the old world is hard to maintain.”
And the supply side is deteriorating. CME Group notes that copper ore grades have declined 40% since 1990. In plain English: miners are digging up more rock to get the same amount of metal. That means more energy, more water, more waste, more capital, and often more political friction per unit of copper produced. Even if prices rise, the physical work required per ton keeps increasing.
This is where the story stops being about “commodity cycles” and starts being about throughput. You can’t print ore grades. You can’t cut interest rates and make geology richer.
The market is already sniffing it. Goldman Sachs noted copper hitting an all-time high of $13,387 per tonne on the LME. That price level reflects real tightness, even if Goldman’s own framing suggests those record highs “aren’t forecast to last.” I’ll come back to that tension, because it’s important. But the price action itself is the market’s way of telling you the system is under strain.
Here’s the part I can’t shake: the “18 years versus 10,000 years” line is not a rhetorical flourish. It’s a claim about scale. If it’s even directionally correct, it implies that the next two decades require a mining expansion that doesn’t resemble anything in modern industrial history.
And that’s before you add the things everyone is actually trying to add: electrification, grid upgrades, renewables, EV charging networks, and the compute infrastructure that now sits behind AI and cloud services.
The math is bad enough. Then you look at who controls the supply chain.
China’s Chokehold
The second wall you hit is not geological. It’s geopolitical.
Even if the West could will new mines into existence, the copper story runs through processing. And processing, in the modern mineral economy, is where power concentrates.
CME Group’s breakdown is stark: China imports about 60% of global copper ore and unrefined copper, produces more than 45% of the world’s refined copper, and consumes about 58% of the world’s refined copper. That’s not dominance at one stage. That’s dominance across stages, with the world’s largest industrial base sitting at the center.
This matters because ore is not the same thing as usable metal. Ore is potential. Refining is conversion. If you control conversion, you control the pace at which the rest of the world can turn rocks into wiring.
And copper is only the beginning of the pattern.
The International Energy Agency has warned that China processes 60% to 70% of the world’s lithium chemicals, a reminder that the chokepoint problem extends well beyond copper into the materials that define the battery economy. In a world trying to electrify transport and storage, lithium processing is not a niche capability. It’s a strategic lever.
Then there’s the export control dimension, where the story stops being theoretical.
Project Blue’s analysis of molybdenum shows that after controls introduced in February 2025, Chinese molybdenite exports to the West collapsed sharply, with China controlling 42–45% of global output. Molybdenum isn’t a household word, but it’s a strategic metal used in high-performance alloys. When exports collapse, downstream industries don’t get a polite memo. They get delays, price spikes, and procurement panic.
Reuters reported that China’s Ministry of Commerce named 44 firms allowed to export silver for 2026–2027, extending an export licensing system. That’s not a ban. It’s not even necessarily a shortage signal. But it is a reminder that “free flow of commodities” is no longer a safe baseline assumption.
And China imposed rare earth export controls in October 2025, further reinforcing the direction of travel: more strategic minerals treated as strategic, more paperwork, more leverage.
When you line these up, the pattern becomes hard to ignore. China doesn’t need to “own the mine” to own the leverage. It needs to sit at the processing choke point, where raw material becomes industrial input.
This is why tariffs often miss the heart of the problem. Tariffs can change incentives at the border. They can raise prices. They can shift trade flows at the margin. But they don’t conjure refineries, chemical plants, or the specialized industrial ecosystems that make processing competitive.
The US response has been tariffs. The question is whether tariffs can solve a processing problem.
The Policy Response
Washington’s most visible move has been to treat copper as a national security issue. In July 2025, President Trump proclaimed 50% tariffs on copper imports under Section 232 authority, explicitly framing the metal as strategic.
Tariffs are a political tool that can be deployed quickly. Mines and smelters are not.
That’s the contradiction sitting in the middle of the policy response. A tariff can try to force domestic production by making imports more expensive. But if domestic capacity doesn’t exist at scale, the tariff mostly functions as a price shock. It doesn’t create metal. It reallocates pain.
At the same time, the bond market drama that’s feeding the precious metals rally is being interpreted through a political lens as well.
AkademikerPension’s CEO Anders Schelde was blunt about his reasoning, saying:
“U.S. government finances are not sustainable”
That’s not a partisan statement but a balance sheet statement. And when a pension fund says it out loud while selling Treasuries, it becomes part of the narrative that gold bugs have been waiting for: institutions moving from paper to metal.
Trump’s response to reports of European funds reassessing U.S. assets was also blunt, but in a different register:
“If they do [sell], there’d be big retaliation... we have all the cards.”
Here’s the tension I can’t get past. “We have all the cards” is a statement about leverage in a negotiation. But the commodity story is increasingly about leverage embedded in physical supply chains, not just in financial plumbing.
If the U.S. depends, directly or indirectly, on processing capacity concentrated in China for strategic minerals, then the “cards” are not all sitting in Washington’s hand. Some are sitting in industrial zones and export licensing offices half a world away.
And tariffs don’t fix that. Tariffs can punish foreign producers. They can also punish domestic consumers. What they can’t do is compress the timeline for building processing capacity, training specialized labor, permitting facilities, and creating the supplier networks that make refining and chemical conversion viable.
So the policy response risks becoming performative: loud signals that don’t change the underlying constraint.
Which brings me back to the question I keep hearing from investors and industrial executives alike, sometimes explicitly and sometimes between the lines.
Is this a trade, or is this a transition?
Trade or Transition
There are two broad ways to interpret what’s happening.
The first is cyclical. The story goes like this: the dollar is weak, inflation psychology is sticky, geopolitics are tense, and commodities are doing what commodities do in late-cycle environments. In that framing, gold and silver can overshoot, copper can spike, and then the cycle turns. The market mean-reverts. The world goes back to arguing about basis points.
The second interpretation is structural. In that framing, we’re watching a repricing of scarce inputs and monetary anchors because the old assumptions about abundance are breaking.
Some industry voices are leaning hard into the structural view. The CEO of Scottsdale Mint framed the move in almost civilizational terms:
“This is not a trade. It’s a fundamental move into how the price is going to continue to perform. The world is transitioning into what will be a new monetary system. Most still don’t have allocation for what is still a long road ahead.”
I treat that quote carefully. It’s an industry participant speaking to an audience that wants to believe the story. The confidence level is high, perhaps too high. But what’s interesting is not whether a “new monetary system” is imminent. It’s that people close to the physical bullion business are describing demand as persistent rather than opportunistic.
Major institutions are also moving their forecasts in that direction. Reuters reported that Goldman Sachs raised its end-2026 gold forecast to $5,400 an ounce, citing private investors hedging macro risks. That doesn’t mean Goldman is calling for a monetary reset. It means Goldman thinks the bid for gold has staying power into 2026.
And the pattern isn’t limited to gold and silver. Goldman’s copper analysis also noted that lithium prices have tripled since summer 2025 and uranium is trading at 52-week highs, a reminder that the commodity surge is broadening across strategic inputs. When multiple unrelated materials reprice at once, it’s often a sign that the driver is systemic: supply chains, geopolitics, and industrial policy, not a single end-market fad.
So how do I tell which interpretation is closer to the truth?
I don’t think anyone gets a clean answer yet. This is where the story gets uncertain in a way that’s genuinely inherent to the moment.
Will precious metals pull back from here, or continue higher? Nobody knows. A pullback could happen even in a structural regime. Volatility is not a disproof. What would clarify it is whether demand remains institutional and sticky even after price spikes fade from the headlines.
Is this sustained de-dollarization or temporary repositioning? India cutting Treasury holdings to a five-year low matters, but it’s not a regime change on its own. What would resolve it is a broader pattern of non-BRICS central banks increasing gold allocations and reducing dollar exposure in a way that persists across cycles.
Will high copper prices incentivize enough new production to close the gap? Classical economics says price signals solve shortages. But copper is not a widget. The lag times are long, ore grades are falling, and processing is concentrated. What would resolve it is evidence that new supply is coming online fast enough to change the trajectory, not just the sentiment.
This is also where the Goldman tension becomes useful. Goldman says record copper prices aren’t forecast to last. The “18 years versus 10,000 years” math suggests the opposite: a structural shortage that doesn’t care about forecasts.
Both can be true in different time frames. Copper can mean-revert in a cyclical downdraft while still being structurally scarce over a decade. Markets can overshoot and undershoot around a trend that remains brutally intact.
But the deeper point is that the structural story doesn’t require you to be bullish every day. It requires you to accept that the physical inputs to growth are becoming binding constraints.
Which brings me to what all this actually means.
What It Means
Gold at $5,000 and silver at $100 are the story people can see. They fit into familiar frames: inflation, debasement, geopolitical fear, central bank hedging. Copper is harder. Copper forces you to do math, and the math forces you to confront scale.
Once I internalized the “10,000 years in 18 years” claim, I stopped thinking of the commodity surge as a normal cycle. I started thinking of it as a collision between physical limits and growth assumptions that monetary policy can’t resolve. Whether you call it a commodity supercycle or a transition into a new monetary system, the underlying dynamic is the same: demand that can’t be met with current supply trajectories, processing capacity concentrated in one country, and policy responses that address prices but not physics.
China’s position is central here. When a country imports roughly 60% of global copper ore, produces more than 45% of refined copper, and consumes 58%, it’s not merely a participant. It’s the clearinghouse. Add the IEA’s estimate that China processes 60% to 70% of the world’s lithium chemicals, and you get a broader picture: the West is not just short of mines. It’s short of conversion capacity. (CME Group; IEA)
That’s why tariffs feel like a partial answer at best. A 50% copper tariff can change trade flows and raise domestic prices, but it doesn’t build smelters. It doesn’t reverse a 40% decline in ore grades since 1990. It doesn’t conjure 10,000 years of mining into an 18-year window.
The beneficiaries in a world like this are not mysterious. They’re the entities that already control scarce inputs: existing copper reserves, processing know-how outside China, and strategic mineral positions that become more valuable as scarcity becomes policy. The constraint rewards those who already have what everyone needs.
The pressured actors are also easy to identify. Any industrial plan that assumes abundant, cheap, readily processed copper is now exposed. Any electrification buildout that assumes supply will show up on schedule is exposed. And any portfolio or balance sheet with heavy reliance on dollar-denominated assets in today’s reality of rising commodity scarcity faces a different kind of risk: not just inflation risk, but replacement cost risk.
What I’m watching now is less about price targets and more about regime signals.
If copper prices stay elevated after tariff noise fades, that would suggest the move is structural, not political.
If China expands export controls beyond the current set of commodities, it would confirm that Beijing sees minerals as leverage, not just commerce.
If the West announces major processing capacity with sub-five-year timelines, that would be a real counter-move, though it still wouldn’t solve the mining constraint.
If central bank gold purchases broaden beyond the usual suspects, it would strengthen the “monetary transition” interpretation.
And if the 50:1 gold-silver ratio holds or reverts, it will tell me something about whether this is a panic bid, a policy bid, or a longer-duration repricing.
I also keep a few falsifiers in mind, because without them this becomes ideology. If copper falls more than 30% and stays down for six months after the tariff regime settles, it would suggest the move was more political and cyclical than structural. If China reverses export controls on strategic minerals, the leverage dynamic changes. And if Western processing capacity actually gets built on fast timelines, the chokepoint risk would ease, even if the geology problem remains.
But none of those falsifiers change the core discomfort. Even in the best-case policy response, the world still has to dig up a lot more copper from a lot worse rock.
The Close
Gold at $5,000 makes for good headlines. Silver at $100 makes for great television. But I keep coming back to that copper number.
Ten thousand years of human mining. Eighteen years to match it. No electrification included.
That’s not a thesis you can trade around. That’s a constraint you have to build around. The question isn’t whether precious metals pull back from here. The question is what world we’re building and whether the materials exist to build it.
The math doesn’t care about tariffs.