The last few weeks have been a mixed bag for Donald Trump. Ultimately, the elections brought success for the Democrats. His approval ratings for trade and economic policy are disastrous. Although the recent rise in inflation is not preventing Americans from consuming, they are dissatisfied with the continued rise in prices under Trump.
The fact that the current price increase is linked to Trump’s tariff policy makes it even more difficult to accept. Americans see this as a burden.
The euphoria surrounding AI is also waning, not least because electricity prices in the US increased significantly last year. Given the continued increase in investment in this area, it is unlikely that the situation will ease any time soon.
Strong demand for components makes producing these systems more expensive and increases demand for electricity, which cannot be generated as quickly as data centres are being built. Furthermore, power lines are often outdated or require rebuilding from scratch, and securing the water supply is also necessary.
The USD Has Always Weakened in the Face of Rising Commodity Prices
Although the price of gold has risen strongly this year, this has been overshadowed by the surge in the price of silver, which has risen by over 20% more than gold, reaching almost 60% (in USD).
This is partly due to the sharp rise in demand for chips and solar panels, but it is also because silver has been mined at a structural deficit for years, with new mines being scarce and old mines becoming less productive.
The same applies to copper, which is virtually irreplaceable in the construction of data centres and power lines. There is also a significant structural supply deficit here that will have a tangible impact by 2027 at the latest.
The price of copper is rising and has recently broken out of the sideways trend it has been in since 2011.
The price of copper is expected to double by the end of the decade, which will have significant implications for electricity production and transmission costs.
As was the case 15 years ago, the consequences of this will certainly be underestimated today.
Rising prices and shortages can make theft attractive, which may result in disruptions to rail networks and electricity production.
The rapid and global growth in demand caused by increasing electrification means that demand is rising faster than supply. Consequently, electricity is becoming increasingly expensive.
Demand Will Continue to Be Fuelled by the Geopolitical Power Struggle
This will push up prices and fuel inflation, subsequently driving down the USD and improving the competitiveness of US industry.
If European industry fails to recognise the challenges ahead and remains paralysed by the fear of making mistakes, it will be overwhelmed by change. This fate can be avoided through agility. The necessary expertise is available, albeit at a cost, but it will pay for itself many times over.
