Jeff Currie on the Crazy Surge in Metals, And Why The Supercycle Has Years to Run

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

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

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:25)

Tracy Medals.

Tracy Alloway (0:27)

That's it, that's the episode.

Joe Weisenthal (0:29)

It's the title.

Tracy Alloway (0:29)

No, you're right. There's a lot happening in the metals space. So we have gold above 5,500 an ounce, which is a record. We have silver above $120 an ounce, also a record. And now we have copper at over $14,400 a ton.

Joe Weisenthal (0:47)

Yeah. So this is something that's super interesting to me, and I think it's a very important dimension, which is that copper is the ultimate industrial metal, right? And for, you know, Dr. Copper tells us about the economy, probably a little overstated, its reputation, but it's the ultimate industrial metal. Gold is the ultimate metal with no industrial uses, right? It's primarily a store of value, a sort of form of money that's existed for thousands of years. And then silver is a little bit in the middle, it's more of a safe haven, but we know it has, it's used in solar, it's used in photography, not that that really exists anymore. But you know what I'm saying, so it's like, it's interesting to see, like, why are they all flying at the exact same time?

Tracy Alloway (1:26)

Yeah, I was going to say the exact same thing. So each of these metals historically would tell you something very specific about the state of the economy. And Copper certainly would be screaming, people are bullish on economic growth, silver, you know, something kind of in the middle. And gold, gold soaring is something that you traditionally associate with stress points, either in the financial system or the broader global economy. And yet here we are.

Joe Weisenthal (1:56)

Yeah, it's all happening in once. And like, you know, you could say like, oh, dollar debasement, right? And we know the dollar has been weak against other currencies. It's not like inflation as measured, you know, is like raging hot. So it's not just a simple story of like, the dollar becoming worthless. So the, you know, the denominator or whatever going up or whatever the other way around is, et cetera. There's something going on with metals. Maybe they're just the new meme stocks, et cetera. But we have to we have to dig in.

Tracy Alloway (2:24)

Yeah, let's do it. All right.

Joe Weisenthal (2:25)

Well, I have to say, we really do have the perfect guest on the perfect day. Again, we're recording this the morning of January 29th. We're going to try and get it out ASAP. But there's headline copper surging 10 percent. Unbelievable headlines. We've had them on multiple times in the past. A believer in super cycles, a vindicated man in many respects with many of his calls. He's a Goldman a long time. We're going to be speaking with the one and only Jeff Currie, who is now a partner at Carlyle, knows commodities as well as anyone else we talked to. So Jeff, thank you so much for coming back on the Odd Lots podcast.

Jeff Currie (3:02)

Great. Well, thank you having me. Commodities are up and back in favor. It was a rough last couple of years, to say the least.

Tracy Alloway (3:11)

You should just ask, is this going to be the peak?

Joe Weisenthal (3:12)

Is this the peak? Yeah, that's the question. Is this the peak?

Tracy Alloway (3:16)

You're back on. Everyone's going to ask, is this the peak?

Joe Weisenthal (3:19)

Did Odd Lots get the peak because they ring Jeff Currie. So let's just get this out of the way.

Jeff Currie (3:23)

By the way, I love that we're in the foothills of the Himalayas right now. So we're not even close to the real mountain peaks yet.

Joe Weisenthal (3:30)

Really?

Tracy Alloway (3:31)

Yes. So I'm going to ask the obvious question, which we alluded to in the intro, but why are all three of these things moving in the same direction all at once?

Jeff Currie (3:41)

When you look at the commodity complex, you take anything that has an atomic number to it, that's in the periodic table, it's going up right now. Even nickel and zinc have joined the party. If it is a molecule and it has a carbon in it, a carbon hydrogen, a CH in it, it's been struggling.

That includes hydrocarbons as well as carbon hydrates like corn, wheat and so forth. That space, the molecules have been struggling, yet you have the things that are primarily critical minerals, things that are in the periodic table, the atomic number have all done well. The fundamentals in copper are not that much tighter than what you have in oil. What's going on in the metal space is hoarding, given the concerns over having availability of these critical minerals. And you threw out the idea of debasement. And I want to throw in three other Ds. De-dollarization and diversity to your debasement. So debasement, de-dollarization and diversity is what's driving all of these different metals. And when we think about the de-dollarization, and that goes back to 2022 when the US and Europeans froze the central bank assets of Russia, every emerging market goes, uh-oh, I don't want to be owning any dollar denominated assets because look what happened to the Russians. And as a result, they're moving as fast as they can out of dollar assets and into assets that cannot be seized. And precious metals and metals are part of that. And then when you have the geopolitical risk as high as they are right now on a global basis, whether it was US cutting off Venezuelan oil supply to China, India and Europe, or it was the Chinese cutting off critical mineral supply to the US and its allies, or it's Russia cutting off supplies and natural gas, it's a dangerous time to be dependent upon foreign commodity supply. And as a result, we have stockpiling. And everybody talks about the squeeze in silver running it up to $120 an ounce. The reality is this is a squeeze by the population of the people in China. You know, they're hoarding the silver over concerns around, you know, export controls and things of that nature.