Goldman's Jeff Currie on the Silver Squeeze and the Coming Boom in Commodities

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

Tracy, so obviously markets have been really fun and wild and crazy lately. You know, I think that when we started talking about some of the stuff with GameStop and everything and illiquid small stocks being pushed on message boards, we didn't expect it to move to a major commodity market.

Tracy Alloway (0:41)

No, and I have to say, I'm reminded of the post you wrote a week or two ago about how it can always get crazier. And I think what we're seeing right now is proof that it can indeed always get crazier. But what started with a relatively small single stock, GameStop, migrated to a bunch of other stocks like AMC and Nokia.

And then it seemed to go to the silver market. And I think silver futures jumped quite a bit, although as we're recording this, let's see, it is February 2nd and they are starting to come back down a bit. But the notion that retail money would go after a market as large as silver is pretty intense. Like that is a big market, certainly multiples of GameStop.

Joe Weisenthal (1:31)

Now it should be noted that there is some ambiguity about where this silver trade emanated from. There are people on the subreddit WallStreetBets that say, hey, this isn't us. We never said anything about silver.

That's not clear. What is clear is that something happened and in a span of just a few days, starting at the end of the last week, maybe Thursday, Friday, through the weekend, basically every retail silver coin site was just instantly out of inventory. Some of them were saying that they got as many sales in two days as they would expect to get for an entire month. So something happened that just sent silver demand, both through physical demand and also plays on the ETF then into the futures market, absolutely wild.

Tracy Alloway (2:17)

Yeah, this is why I find some of the Reddit or Wall Street bets pushback on this really weird. Like they're all saying that it's hedge funds buying silver and it's bots trying to push the price of silver up on the subreddit. But the fact that all the coin stores are sold out of American Eagles kind of makes me think that there is a retail component here. And I'm sure, you know, Ken Griffin isn't going down to his local coin store to load up on still harmonic coins or something like that.

Joe Weisenthal (2:47)

Now, Tracy, we're gonna get to our guests in a second, but have you posted a video yet of you stacking silver? Over?

You promised you were gonna do that.

Tracy Alloway (2:58)

I did, but then I got really sidetracked and tired by the podcast recording schedule. I will do it.

I will try this week. I promise again.

Joe Weisenthal (3:07)

Maybe you could time the release of the video for this episode. So unfortunately, we're not interviewing your dad because we've been talking about that forever. We know your dad is a big silver bug, but we're not getting him.

But I'm extremely excited about our guest. In fact, we booked him before all the silver mania happened because there is actually so much more to talk about in the broader world of commodities. And it was originally, we're going to talk about all that. So there's so much going on in commodities, silver, oil, the broader macro picture, industrial commodities, copper, et cetera, all wild stuff this year. So we have the perfect guest for it.

We're going to be speaking with Jeff Currie. He is the global head of commodities research at Goldman Sachs, a role he's occupied since 2006

Longtime veteran at Goldman Sachs, been there for 25 years, and really just sort of knows more about the commodities world than almost anyone you'll speak to. So the perfect guest today. So Jeff Currie, thank you so much for joining us.

Jeffrey Currie (4:06)

Great, thanks for having me.

Joe Weisenthal (4:08)

Jeff, I don't want to get you in trouble or have you say anything bad about people who buy commodities, but honestly, what is the deal with people who buy silver? Because I will say that in my career of following markets for the last 10 or so years, there's something about silver people. They're just like wired a little bit differently.

Tracy Alloway (4:27)

Silver people.

Joe Weisenthal (4:29)

I'll just leave it at that. Silver bug, silver people. What is the deal with silver and why does stuff like this happen?

Jeffrey Currie (4:36)