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

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1:03Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Tracy, metals. That's it. That's the episode. That's it. It's the title. No, you're right. There is 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. 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.

1:49Gold 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? 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.

2:22And copper certainly would be screaming, people are bullish on economic growth. Yeah. 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. Yeah, it's all happening at once. And like, you know, 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 is measured, you know, is like raging hot. So it's not just a simple story of like the dollar becoming worthless.

2:58So 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 dig in. Yeah, let's do it. All right. 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 this headline, copper surging 10 percent, unbelievable headlines. We've had him on multiple times in the past, a believer in super cycles, a vindicated man in many respects with many of his calls.

3:35He's a Goldman a long time. We're going to be speaking with the one and only Jeff Curry, who is now a partner at Carlisle, knows commodities as well as anyone else we talk to. So, Jeff, thank you so much for coming back on the Outlaws podcast. Great. Well, thank you for having me. Commodities are up and back in favor. It was a rough last couple of years, to say the least. What do we just ask? Is this going to be the peak? Is this the peak? Did we? Is that's the question? Is this the peak? You're back on. Everyone's going to ask, is this the peak? Oh, did online get the peak? Because they called they ring Jeff Curry.

4:07So let's just get this out of the way. 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. Really? Yes. Okay, 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? 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.

4:45So that includes hydrocarbons as well as carbohydrates like corn, wheat, and so forth. So 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. And 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, dedollarization and diversity to your debasement.

5:28So debasement, dedollarization 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 U.S. 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 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 U.S.

6:11cutting off Venezuelan oil supply to China, India, and Europe, or it was the Chinese cutting off critical mineral supply to the U.S. 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. So you mentioned China just then, and this is exactly what we wanted to ask you about, which is if you've stripped out what's going on in China, how much of the rally would disappear in something like gold?

7:00I mean, the vast majority of it is not just China, but emerging markets, central bank buying, basically reduce their holdings of Western bonds that can be frozen similar to what happened with the Russians. So do not underestimate the impact that China's had. In fact, if anything, China and the other emerging markets have squeezed other participants in the gold market out. And you still have a long ways to go. I like to point out that in 1970, when Nixon took the U.S. off the gold standard, Central Bank reserves of gold stood at around 40 percent. Last time I calculated late in the last year, wasn't that 27 to 28 percent?

7:42But the run up in the last couple of days could be as high as 30 by now. But I think the key message is there's still a lot more buying by central banks who diversify themselves out of dollars. I'm still a little bit confused. What is it about silver particularly that's so desirable right now from the population in China? Because just let's talk about hoarding and some of these issues. It's totally understandable why China wants to hold certain strategic assets, right? It wants to accumulate a lot of oil in part because of defense purposes, because in the event of a war, for whatever reason, they may get shot out of oil.

8:19So they need a lot. What is it about silver in the population context that makes it so desirable? And by the way, I'm looking at a chart is from two days ago. But the Shanghai silver premium buyers in China paying more than five dollars an ounce versus everyone else in the rest of the world. But explain what is it that's driving this purchase from the public in China? okay first let's talk about its role as a critical mineral it goes into the production solar pv and that makes it as you pointed out the beginning 50 an industrial metal and then 50 of a store value like gold so the fact that it has these dual uses it's a critical mineral and important to the electrification process on a global basis remember it's a superconductor Actually, let me go back to answer your question.

9:08Tracy, you said, what do gold, silver, and copper all have in common? They're superconductors. I know people say, well, Jeff, copper isn't exactly a definition of a superconductor. It's not as strong as silver and gold, but it sits up there in that electrification process. And so when we think about silver, it's critical for the industrial base of China, given the importance of solar panels as a part of the industrial manufacturing process in China. So, you know, if you're the PBOC or somebody like that, you're going to be very focused on making sure there's adequate silver supplies inside of China.

9:45So the fact that it also then has a store of value like gold and accessible by many parts of the population, because even at, you know,$100 an hour,$120 an hour, as we were this morning, it still makes it a much more affordable store of value. So I think the two key points for China and why silver is so important is its role as a critical mineral and as a superconductor. And given the importance of solar panels and other types of renewable investments to the Chinese industrial base, having a secure supply of silver is absolutely critical to the Chinese economy. Second of all, is when we look at the price of silver, even at$120 an ounce, it is still very affordable to many of the population as a store of value similar to gold.

10:40And also given the recent price trends, people feel comfortable in holding it. So it has those two components that make it critical to the Chinese economy. Some people would say that like, all right, you can look at all these things surging and tell a story about debasement and electrification and what the future world is going to look like, some other people would say, well, you could tell an even simpler story, which is that one of these markets is wrong, right? So maybe copper sees economic growth going to the moon, although it seems kind of unlikely to me. Maybe silver is somewhere in between.

11:16Maybe gold is wrong about the debasement thesis, whatever. How do we know that we're just not seeing investors get this one wrong. People are just going in for momentum. Or the meme quantification of precious metals. Well, I do think when we talk about a commodity super cycle. The S word. Which, by the way, is nothing other than a commodity CapEx cycle or a big global CapEx cycle. And we're seeing that, you know, whether it's an investment in defense, investment into AI, data centers, the list goes on. This is a world-scale CapEx boom we're now entering, and that typically is when you see the big commodity super cycles, one in the 70s, one in the 2000s.

11:59I mean, just take the defense spending in Europe alone. It's likely to be 9 trillion euros over the next decade. To put that in perspective, the Chinese boom in the 2000s was 10 trillion US. Today, it's about 15. So even just Europe on a loan, we haven't even factored in data centers and AI. So when that occurs, typically what we see is a repricing and re-rating towards asset-heavy industries and commodities. Or another way to think about it is short duration. As strangely as when interest rates are low, everybody thinks, oh, you would be doing CapEx cycles. No, you do them when their interest rates are high because the interest rates are high.

12:41they're telling you you need to put money into the ground. And so we're moving into one of these repricing towards asset heavy industries, which is why it'll ultimately be sustainable across the entire commodity complex. And I just want to take a step back and talk about these repricings, because in my career, I've lived through two. The first one was in that call it O2 through like O4 time period. And that's what we coined the term revenge of the old economy. Old economy is asset heavy. New economy is asset light. And that asset light in the late 90s, 2000s was really about the scalability of software.

13:21You don't need to have put a lot of money into the ground to be able to create growth. And that was the whole asset light model. But eventually we ran out of all of these heavy industries that you need to make the investments in. And then China came on the scene, it became clear we need to make those investments. And that happened over that decade. But that repricing, re-rating was a violent process as you moved out of new economy or into the old economy. The next time we saw that was in 1415, where we moved out of the old economy and into the new economy. Why? Because it was clear China was at the end of the track.

13:59And if you remember that time period, we'd go through there, the euro went from like 1.4 to parity in the course of like 18 months. I remember the period oil was coming down$7 a barrel like every other day. Everybody's, what's going on? What's going on? But I want to make a point here to get to your point about why is this sustainable across all these commodities? And when we look at, I want to take a private equity pitch book in 2012 of a Canadian oil asset. they valued the asset at 110 a barrel the irr of that asset that this oil field was 25 at 110 now fast forward to 2016 after the macro repricing oil was sitting around 40 a barrel now let's go reprice the irr of that asset what do you think it is immediate response people go oh it was negative irr no it was around 18 19 it didn't come down much Why?

14:58It's because the Canadian dollar repriced, so wages went down. You had a repricing of the cost of capital. You had a repricing of copper, iron ore. They all came down. And so your cost basis came down such that the IRR was far more stable over that repricing. And that's ultimately what we're starting to see happen across this space right now. And I believe we're in one of these repricings where we're going to move back into the asset heavy space. I want to make one last point before moving on this during this. It's going to make this one really different from ones in the past. I want to go back to the 1960s because it's similar to today.

15:38And that was at least in the modern data, the first big commodity super cycle. The asset light space back in the 60s was companies like Coca-Cola. In fact, all the Nifty 50 were brands. What do brands have similar to, let's say, Microsoft? infinitely scalable at zero marginal cost. And so Coca-Cola was the world's darling right now, and all of the big commodity producers, the miners, the oil companies were at the bottom. And then you had the Arab oil embargo create that catalyst to reprice. Now, what happened here is that that's different today. So you think about that asset light space was Coca-Cola then, and then And then in 2000, it was Microsoft.

16:23And today it's Google and the hyperscalers. Now, here's where it gets really different in the power of what's going to happen now is the asset light space is getting into the asset heavy space, i.e. these hyperscalers are putting steel into the ground. And by the way, you're no longer a asset light, infinitely scalable software company. You're a miner. You're an oil company. You are a commodity producer. Your multiple is going to get re-rated. And so what we have is the asset light space this time is moving into the asset heavy space and putting steel in the ground. So this is going to be a real violent transition.

16:59So you ask about copper and silver and the rest of these things. One of the restrictions on their big CapEx budgets is the availability of transformers. What are transformers? Big chunks of copper. And so we have a difference in this cycle than ones in the past is the asset light space is colliding in the physical space at the exact same time, which is what I tend to think that this repricing is going to be more violent, more sustainable. And what you're going to see, and it goes to a simple point that I observed in the 2000s was when oil first went out because, oh, it's a bunch of investors buying oil.

17:32It sits at$60 a barrel. It did supernatural returns. No, you actually had capital rotate out of the asset light space and into the oil space during 0.4, 0.5, such that the cost basis actually rose and there was no supernatural return. So go, Tracy, back to your point, how sustainable is this? Well, what we're seeing is all the capital flowing into this asset-heavy space, and it's going to build the ground underneath these prices and support them from a relative cost basis. And so when we think about$14 ,000 a ton copper, it doesn't mean these guys are earning supernatural returns because we see so much capital moving into space.

18:14Thank you.

18:44leading a business, the Barclays Brief podcast can help you make smarter decisions today. Stay sharp, stay briefed. Find Barclays Brief wherever you get your podcasts. Hey there, OddLots listeners. As we come into 2026, we are realizing that one thing we're constantly thinking about on the show is how companies actually get built. Not just like the headline version of that story, but the messy operational reality of it. Right. We love messy operational reality of things. The never ending quest to dive deeper, how companies make it big, what causes one company to succeed, why others fail. Well, I have good news.

19:27That is exactly what the Acquired podcast does. Ben Gilbert and David Rosenthal pick a company and then explore all the ins and outs of its trajectory. Lots of detail there, how it scaled, the ups and downs, and so much more. Yeah. And we actually, we had them on Odd Lots back in February last year. We talked to them about everything from TSMC, NVIDIA, Mars, Hermes, scale, capital structure, the importance of incentives, all of the different, I guess, ingredients that go into some of the success of these names that we talk about every day. Also, their show actually turned 10 years old in 2025, just like us.

20:04So we're, I guess, the same age in podcast years. Big year. Anyway, if you like OddLodge, the way we get into various market dynamics, how the economy actually works under the hood, you'll obviously appreciate and enjoy the Acquired Podcast. They do similar work, similar ideas, all focused on the context of individual companies. So go check out the Acquired Podcast. You can find them wherever you get your podcasts.

20:31I absolutely love that comparison of the software companies to the Coca-Colas and this idea that there are certain business models that can scale incredibly with very little physical needs. And the way you framed that, I thought it was very helpful to understand. And we've certainly talked a lot on the podcast about the hyperscalers getting into the real business of things and you know, going up the chain and in some cases getting, you know, getting into the power production, investing in their own nuclear plants and hiring power traders. So all of this feels very real. Let's just like you say we're in a super cycle.

21:07You say we're at the foothills of the Himalayas. What is history or your work say about how big and how far this can go? Well, I mean, historically, these cycles last summer around 12 years. The one in the 70s did, the one in the 2000s did, one in the 70s from 68 to 1980, the one in the 2000s from essentially 2002 to 2014. A lot of people say, oh, the world's different today than at any of those other points time. Putting steel on the ground still takes about the same amount of time, technology or no technology. I like to point out where do you get the 12 years? The first three years are getting people to believe it before they start to really invest earnestly.

21:47And I would say this one started in 2020. And so the fact that we lost two years in 23 and 25, whether it was copper oil, part of the reason for that was the rally in prices was so steep after that Russian-Ukrainian invasion that the policy response globally was incredibly swift. I want to point out that policy response in 22 and 23 was not so much the rise in interest rates, but the creation of supply. and i say that is because you had inflation come down everywhere in the world in a synchronous manner and it did it against record commodity demand and really strong gdp growth in the united states what does that tell you it simply could not have been interest rates and the demand side it had to come from the supply side where did they get new supply russia iran venezuela you know some of the issues that are facing the state.

22:44They got it through increased immigration on the labor side. There was a lot of ways they created supply all over the world to be able to deal with that. Now, the point this time around, and everybody's bought into this oil supply glut, we don't have a problem, is that those easy fixes are not going to be available next time around. So this one's going to take longer than normal. But I also want to go why I'm comfortable with this being a super cycle, is all of these things are all policy-driven. The one in the 70s was due to the LBJ's war on poverty, the big defense spending, sound familiar? And then you had the Arab oil embargo.

23:23If you look at what happened in the 2000s, it was the decision to admit China and the WTO, a policy decision. Here, the policy decisions is the war on free trade. And it's not just the U.S. doing it. Everybody's doing it. You know, curtailing commodity supply around the world. In fact, the three points we laid out in 2020, in fact, it was on this show we laid them out, they're still very much valid today. And they were all policy decisions. One was deglobalization, the war on free trade. I mean, if anything, it's been turbocharged now from five years ago. And when we think about it, it's all policy decisions.

24:00It is not just inside the United States where we're seeing this. You know, the Chinese cutting critical mineral supply, you know, Europeans focused on, you know, protecting themselves, defense spending, the list goes on. Let's go to the second one. At the time, decarbonization or electrification. And I know a lot of people are going to look at, oh, well, didn't the U.S. backtrack on that with, you know, the recent political shifts? The answer is absolutely not. The rest of the world is doubling down on electrification for both. When we think about the electrification of the world, where it wasn't decarbonization was not the motivator today.

24:35It wasn't then and then going back in time. Why do I say that? Why did China build cutting edge technologies and nuclear power, solar, wind, batteries, and the rest of it? They did it for energy security. Kind of goes into the deglobalization point. They want their own secure energy supply. In fact, Carter coined the term energy transition and wanted to transition out of oil into renewables in 1977, not because they wanted to save the world, but because of energy security. One last point on this is France, lowest carbon footprint in the world. It didn't get there because it wanted to save the planet.

25:11It got there because it wanted nuclear power. So it was Charles de Gaulle's decision to rid itself of the oil trade. So this story, regardless of what's going on in the political pushback, And I don't think green was ever probably the right way to phrase this. It's renewable. It's a secure source. Nuclear power is a secure source. Throw data centers, AI all on top of it. It's turbocharged from the last time we talked about. And then finally, the third point was redistribution of the war on income inequality. With the K economy, this is alive and kicking. Wait, say more about that last point. Well, when we think about commodities and actually, Tracy, I've seen you even make this point that I made back five years ago was that when you see inflation and you see commodity demand, it has to be coming from the low income groups.

26:03This is a point I think people get backwards. Inflation is bad for the high income groups. And the reason why is because the low income. This was a great call that you made, by the way. Yeah. And the low income groups are the ones that actually think about this. corn. A high income person will consume the same amount of corn at any point in time. The marginal demand has to come from the low income groups. And so when you give them money, like fiscal transfers, and to keep the masses happy in certain situations, what are they going to do? They're going to spend it. They're going to spend it on commodities and physical goods.