# Commodity Supercycle Driven By Geopolitics And Capex

**Podcast:** Odd Lots
**Published:** 2026-01-30

## Transcript

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Hello, and welcome to another episode of the Oddlots Podcast.
I'm Joe Weisenthal.
And I'm Tracy Alloway.
Tracy Metals.
That's it.
That's the title.
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 $1,4,400 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.
Gold is the ultimate metal with no industrial uses, right?
It's primarily a store of value, a sort of uh 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 don't have a saying.
So it's like it's interesting to see like why are they all flying at the exact same time?
Yeah, I was gonna 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.
Yeah, it's all happening in 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 uh story of like the dollar becoming worthless, so the you know, the denominator or whatever going up or whatever the other way around is, etc.
There's something going on with metals, maybe they're just the new meme stocks, etc.
But uh, we have to 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 gonna try and get it out, ASAP.
But this headline, copper surging 10%, 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.
He was a goldman a long time.
We're gonna be speaking with the one and only Jeff Curry, who is now a partner at Carlisle, knows commodities as well as anyone else we talked to.
So, Jeff, thank you so much for coming back on the Outlaws podcast.
Great.
Well, thank you having me.
You know, commodities are up and you know, back in favor.
It was a rough last couple of years to say the least.
What do uh what am I?
We should just ask, is this gonna be the peak?
Is this the peak?
Did we is uh yeah, that's the question.
Is this the peak?
You're back on everyone's gonna ask, is this the peak?
Oh, did oddlaws get the peak because they called they rang Jeff Curry.
So let's just get this out of the way.
By the way, I love it.
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 gonna 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.
So 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.
So what's going on in the metal space is hoarding, given the concerns over having availability of these critical minerals.
And you you threw out the idea of debasement.
And I want to throw in three other D's D 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 of natural gas, it's a dangerous time to be dependent upon foreign commodity supply.
And as a result, we have stockpiling.
And we 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 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 stripped out what's going on in China, how much of the rally would disappear in something like gold?
I mean, the vast majority of it is not just China, but emerging market central bank buying, basically reduce their holdings of Western bonds that can be frozen similar to what happened with the Russians.
So, you know, 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 do you still have a long ways to go?
I like to point out that in 1970, when Nixon took the US off the gold standard, central bank reserves of gold stood at around 40%.
Last time I calculated late in the last year, wasn't that 27 to 28%?
But 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.
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, so 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, it's from two days ago, but the Shanghai silver premium, buyers in China paying more than $5 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 at the beginning, 50% an industrial metal, and then 50% of a store of 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 answering your question, Tracy.
I know people say, well, Jeff, copper isn't exactly a definition of a superconductor.
It's not as strong as uh 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 something like that, you you're going to be very focused on making sure there's adequate silver supplies inside of China.
Um, so the fact that it also then has the store of value like gold and accessible by many parts of the population, because even at you know, $100, $100 an hour, $120 an ounce, as we're this morning, it still makes it a much more affordable uh you know, uh 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 the 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.
And 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.
Maybe 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 meme coinification of precious met of metals.
Well, I 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 capax 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.
And we're already, I 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 it 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.
Strangely is when interest rates are low, everybody thinks, oh, you would be doing capex cycles.
No, you do them when the interest rates are high because the interest rates are high, they'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 02 through like 04 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.
You 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 and 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.
And if you remember that time period, we 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.
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'm gonna take a like a private equity pitch book in 2012 of a Canadian oil asset.
They valued the asset at $110 dollars 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 responsibility, people go, oh, it was negative IRR.
No, it was around 18, 19%.
It didn't come down much.
Why?
Is 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.
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.
Is I want to go back to the 1960s because it's similar to today.
And that was at the 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 in 2000 it was Microsoft, and 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 an 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.
So you ask about copper and silver and the rest of these things.
What are 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 once 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 up because oh, it's a bunch of investors buying oil.
It sits at sixty dollars a barrel.
That's supernatural returns.
No, you actually had capital rotate out of the asset light space and into the oil space during 2004, 05, 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 gonna fill the ground underneath these prices and support them from a relative cost basis.
And so when we think about $14,000 a ton copper, doesn't mean these guys are earning supernatural returns because we see so much capital moving into space.
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Hey there, Otlots 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.
Yeah, and we actually we had them on Odlots 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.
So we're uh I guess the same age in podcast years.
Big year.
Anyway, if you like oddlots, 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 company.
So go check out the acquired podcast.
You can find them wherever you get your podcasts.
I absolutely love that comparison of the software companies to the Coca-Cola's and this idea that like there are certain business models that can scale incredibly with very little physical needs.
And I the way you framed that, I thought it was uh 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, you 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 somewhere around 12 years.
The one in the 70s did, the one in the 2000s did, the 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 the 12 years?
The first three years are getting people to believe it before they they start to really invest earnestly.
And 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 or oil, and 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 in 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 us a they 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.
If you look at what happened in the 2000s, it was the decision to admit China the WTO, a policy decision.
Um, here, the policy decisions is the war on free trade.
And it's not just the US 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, but 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.
It's 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 US 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.
It 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 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.
It got there because it wanted nuclear power, so it could 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 turbocharge from the last time we talked about.
And then finally, the third point was redistribution or the war on income inequality.
Yeah.
K 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, you 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.
This is a point I think people get backwards.
Right.
Inflation is bad for the high-income groups.
And the reason why is because the low income is a good thing.
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 you know, to keep the masses happy in certain situations, what are they going to do?
They're going to spend it and they're going to spend it on commodities and physical goods.
And that ends up creating that inflation.
And then the high-income people suffer because the visit, the physical response by policymakers to the higher rates, is wealth comes down.
Another way to think about it, all inflation is the wealth transfer between the high-income groups and the low-income groups, and then they go out and spend it.
And so when we think about the demand here, is that third one, which is this war on income inequality, is just going to demand more and more types of transfers to the lower income groups to be able to deal with the civil unrest.
And it is alive and kicking everywhere in the world right now.
And so I would assume, you know, that you know, if you liked any of these three stories back in 2020, you gotta love them today.
Just going back to the supercycle thesis and the role of policy, how do we know that the importance of a lot of these metals, the strategic importance?
How do we know that that won't end up increasing supply faster than we expect?
You know, part of the story, especially in copper, is that it's not that many people are pulling it out of the ground anymore.
It takes forever to get a new mine started.
How do we know that governments aren't just gonna make it easier to get this stuff?
And so you'll see a supply response faster than perhaps you saw previously.
Let's go back to my point.
You know, these are 12-year cycles.
It's just putting steel in the ground takes a long time.
Even if you got rid of all the bureaucracy and red tape, it's gonna take time.
But let's go to the critical minerals.
Why does China dominate these?
They did it because the Soviets and the Americans didn't want to touch the downstream processes because of not in my backyard for NIMBY reasons.
I mean, even the Soviets, let me remind, I say the Soviets, because this decision was made in the 70s.
Remember when the EPA, the super fund sites and all of that?
The Americans and the Soviets used to do this.
They quit doing it and farmed it out to the Chinese because they didn't like doing it in their backyards.
Those are really highly toxic processes.
And so if you're going to onshore them and bring them back, you've got to figure out technologies to do this in a way that's going to deal with those NIMPY problems that people didn't want to deal with 50 years ago.
Um so it's going to be very expensive, time consuming.
There's ways to get around it, but it, you know, whether if you've I heard you know you can build these facilities on army land in the United States, you don't get any of the bureaucracy around environmental problems.
But even so, and the last thing you this stuff you do, you know, if you didn't like it in the 70s, you're still not gonna like it today.
Um so I it's not something that can be resolved overnight.
It's gonna take a long time.
It's gonna take an enormous amount of capital, new technologies created, rerouting supply chains around the world.
That's why I say that we're at just the tip of the iceberg on what needs to be done here, which is why I think it's gonna go on, you know, for at least another decade.
And I mean one last point about the super cycle, the 70s and the one in the in the 2000s.
They were sequences of price spikes.
They weren't a steady upward trend.
You had one in 73, another one in 77, 78, and another one in 80.
In the 2000s, you had one in 2004, 05, another one in 2008, and then a the final finale in 11, or late 10 and 11.
It was with Libya and then copper topped 11,000.
So everybody thinks they're like this steady upward trend in prices and the assets.
The reality is their sequence of price spikes.
And this one will be more bubbly in nature.
I like to say it's a bubbling cauldron of supply and demand imbalances.
And in part of this is because of what happened with the surge in investment around, let's call it the green investment around net zero, 2050.
I like to say that that investment occurred from around 2015 through about 21, 22.
It created an environment where you have lots of, let's say, renewable wind in places like Germany or Spain, but you don't have the batteries, the grid, and the rest of it.
So what that creates is these pockets where you can see big shifts where you have negative prices of power at some point, explosive prices on the other side.
So the one thing about this time around, it's going to create much higher levels of volatility across the commodity space.
I think silver, you can see you get into these pockets where it'll go up and down.
And you know, whether if it was California power in the 2000s and that that command cycle, which sure reminds me of what silver's doing today, is you end up with an environment in which the volatility gets higher, the volatility then scares investors away, the lack of investment then reinforces the higher volatility.
And I think that that dynamic in this bubbling cauldron of supply and demand imbalances is just going to be that much more vicious this time around than in the past.
Jeff, you're my favorite person to talk to about commodities.
But my second favorite person to talk to about commodities is the Uber driver that I had in 2022.
Who when he was dropping me off at Bloomberg, and I mentioned this on a previous episode, he's like, oh, I have a thesis.
I'm really long silver because it has all these industrial uses, but silver is frequently mined as a byproduct of copper production, and there isn't a lot of new copper production happening at this current state.
And therefore, we're not going to see a big supply response be elicited on the silver side.
And so you're going to get this mega squeeze.
So he's my second favorite one.
That was 2022.
Now in January 2026, I mean, clearly the price was right, but this phenomenon, as he described it, does that sound uh pretty accurate to you?
Absolutely.
I mean, with all of these, it's by the way, that you you can get the supply.
It's not a scarcity of the commodities, whether if it's critical minimal, even copper, it's like it's the access.
It's it is the political access to where the resource is, but more importantly, it's the willingness of capital to provide the money.
I like to say it's not about the supply and demand of the molecules or uh of the metric tons or the bushels, it's about the supply and demand of the capital used to create the production.
Therein lies the core problem.
And the capital has not moved in.
So, Tracy, back to your point.
How long has it got?
We haven't even moved the capital in yet.
The capital is still sitting in the new economy or asset light world.
And the returns, you know, by the way, I've asked people, I go, like, and this was in like 23, 24.
I go, hey, why don't you want to put money into these this space?
The answer was, Jeff, I agree with your story.
The problem is the tech space is providing such good returns that if I am underweight the space, I got a problem.
And I'd rather be putting the money into what's out before me.
That was the case in 23, 24, 25.
Just to be clear, since the last time we talked to you, there has not been a ton of activity in terms of let's actually start digging.
No, because the pullback in late 22 and early 23 was so vicious across this entire space that the money they looked at it, go, I got beaten up.
You know, Curry, you told me to go in back in 20 and 21, work for about a year and a half.
I got absolutely cremated on the backside.
I'm not going to do that again.
And so they got beaten up over that time period.
Their willingness to go back in and believe the story is not that high.
They're going to have to see it.
And now that's moved so quick, so fast, like it did in 22, that they're going to look at it and go, oh, I've missed it.
And I think, you know, it's like Tracy's point is how how much further this go?
How sustainable is it?
And I think the key point there is it's got it's that volatility is discouraging them.
And that's why I tend to think what is going to force the money into this space is you're gonna have to have the returns in the asset light tech or whatever you want to call it world, get to a point that they're going looking at the old economy going, I'm willing to take that risk and go in it because that's the only place that has returns.
And when they do that, that's when you're gonna end up seeing the rotation.
And I also want to go back to a point here is the market is so severely underweight all of this stuff because it's been so hated for so long that when the money rotates anti-gold bug.
But when the money rotates, it it's gonna be plain catch up.
Whether if it's you know the two and a half percent weighting of energy in the S P 500 versus what a seven or eight percent weighting on revenues, the market cap is too small.
And what if it's in metals and mining, critical money?
These things are just so tiny.
It's like I wear I was talking the other day.
You take FCX and let's see Ivanhoe Mines and some of the other smaller copper producers.
So, what is their market cap is is all together 200 billion versus Nvidia at four and a half trillion?
Now all of a sudden you take that money out there and it has to go chase this space.
And so you're asking how high can it go?
You can go really high because you're talking about moving trillions of dollars out of asset light into asset heavy when nothing's been here for over a decade.
Jeff, very, very quickly, are there any risks to the structural super cycle thesis?
Is there any indicator that you're watching to suggest that okay, maybe it's not gonna happen, or maybe it's not gonna happen at the moment that you're currently predicting?
I I first I want to talk about the difference between equities and commodities.
Commodities are driven by the real physical supply and demand.
And equities in financial markets are driven by expectations.
Expectations can or cannot happen.
I trying to figure out what the next person's gonna do and what they're going to buy actually can be modeled and thought through, but it's less predictable.
Long-term supply and demand balances of commodities, you know when you have a problem.
By the way, people don't push back.
I mean, when I think I said on the last time here, copper is the best trade I've seen in terms of fundamentals.
Stan Druckermiller recently, he made the same comment that hey, it's tight.
Yeah, it's really tight, but it may not work today, tomorrow, the next day.
I know if I sit on the position and hold it long enough, eventually you'll get to that point where it does pay out.
Because you know the physical supply and demand, the rubber meets the road and you see the rise in prices.
Now, the question is can you stay liquid long enough before that event occurs?
So, first of all, the reason why I'm so confident to these stories is the forward on these markets are incredibly unbalanced.
Whether if it is in copper, you know, the industrial metals, you know, the critical minerals, oil, all of them are really imbalanced.
So that's the thesis why that my confidence.
Now, what is the near-term risk?
It's not that you know that you're gonna, because we're gonna electrify the world.
You don't have enough copper to electrify the world.
The risk is like the demand for in housing demand in China collapses.
But that happened in 23 and 24.
So you've already paid the price on that one.
So when I think about these risks that you're talking about, they might come from the demand side because you cannot create supply from thin air.
So it has to be demand coming down.
But that demand coming down just ultimately delays how long it'll take before you run into problems.
The main reason why copper didn't perform in that 23, 24 time frame is we underestimated the severity of the property contraction in China.
Right.
And part of that was the high interest rates in the West forced the Chinese to keep interest rates too high because they can prevent capital outflow.
And as a result, it really hurt that property sector.
So that would be, you know, the it's it's different than the the financial markets because the expectations can change on a moment, and they're hard to forecast.
Bottom line, you need this investment.
Jeff Curry, perfect guest, perfect day.
Thank you so much for coming back on oddlock.
Great.
Thank you for having me.
It's quite enjoyable.
Truly the perfect guest.
And congrats on uh all your structural theses that seem to be playing out.
Great things.
Take care, y'all.
I love that I mean Jeff's just the best.
He's so good.
He's so good.
I'm so glad we could get him on today in particular.
I should just mention we're recording on January 29th.
The price of metals is going up so quickly.
Who knows what it's going to be tomorrow?
I think the most I mean, there are so many powerful ideas and compelling notions.
To my mind, one of the strongest ideas that I think is sort of under discussed in the debate is the intersection of the commodity rally and the war on free trade.
Right.
And you know, we look at things, uh, they're getting a little bit more expensive here.
People sort of look like, oh, is the tariffs being passed through, etc.
But this deeper dynamic that if you don't have a world of sort of relatively open trade, then that forces everyone to stockpile, and that forces everyone to build their own version.
And that all I'm gonna build a chip plant here, and I'm gonna build a chip plant there, and I'm gonna build a chip plant there because we're also worried you have that duplication that it's the war on free trade that whether it's public or private forces all of this commodity intensive spending.
Yeah, all I'm gonna say is it's good to hold gold and silver coins.
Stop rubbing stop rubbing.
Well, the problem is it feels good.
It feels good, but well, that's the thing.
I don't even know how to sell.
Like I I would have to carry a bunch of gold coins through New York and find a dealer or something.
You know what?
We need to take another trip through the uh diamond district where there are plenty of science under windows.
We buy gold and so forth.
Well, I would actually do an episode on buying physical gold.
Well, let's do an episode on selling physical gold.
Yeah.
Okay.
How do you actually do that?
Are there certain ways to do it that are better than others and all of that?
Yeah.
I have a silver bar somewhere too.
I need to find that.
I like uh I'm gonna bring it in and use it as a paperweight just to annoy you.
Well, I have my uh I have my uh what's it called?
The not the um what's that metal that tungsten.
I have my tungsten cube.
That metal that you are obsessed with and now you've forgotten.
I should have asked if that's my one that's my main exposure to hard assets is that tungsten cube that is a paperweight.
I think so.
I mean, he said every element in the he said the the story is that if it's an element in the periodic table, it's gone up in price.
And I actually think tungsten has gone up quite a bit in uh price, but I didn't exactly buy in size.
I think my cube cost about $300, just something like that.
But okay.
Um, shall we leave it there?
Let's leave it there.
This has been another episode of the Odlots podcast.
I'm Tracy Alloway.
You can follow me at Tracy Alloway.
And I'm Joe Weisenthal.
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