Wall Street bigwig warns: AI bubble is about to burst, the revenge of the old economy has begun — can you still hold your $BTC ?

Jeff Currie, former global head of commodities research at Goldman Sachs and now a senior advisor at the Carlyle Group, recently delivered a blunt message. He said the current commodities supercycle started in October 2020 and is far from over. Meanwhile, the AI technology segment represented by NVIDIA is seriously overvalued in relative terms, while energy and physical hard assets are severely undervalued. Energy’s share of the S&P 500 has fallen to only about 3%, and it should rebound to 10% to 15%. Ultimately, this room will have to be carved out from the AI sector. Currie calls this kind of structural shift “the revenge of the old economy.”

He talks about historical cycles. This is not accidental, but rather a structural rule that repeats roughly every 12 years. Massive construction took place in the 1950s; prices were suppressed in the 1960s, as capital chased “Nifty Fifty” new economy assets. When investment in the old economy stalled, it ultimately sparked the commodities supercycle in the 1970s. The commodities supercycle of the 1970s was not caused by the Arab oil embargo—this was only the fuse. The real seeds were planted earlier, when investment stopped in the early 1960s. When the internet bubble burst in 2002, Currie first proposed the concept of “old economy revenge” at Goldman Sachs. Back then he thought it was a coincidence; now he is certain it is the repetition of a systemic pattern.

The current supply-side picture is clear: refining margins are nearly flat with crude oil prices, rooted in long-term underinvestment in refining capacity, compounded by damage to Russian refineries. Copper mines and oil fields likewise lack effective investment. Currie says oil prices can’t rise because there isn’t enough refining capacity, not because there isn’t enough crude oil itself.

Three demand-side engines continue to accelerate. On deglobalization: from the expansion of defense spending and the reshoring of critical minerals industries, to the shift in supply chains from a “just-in-time” approach to a “just-in-case” backup inventory model—each item is highly dependent on commodities inputs. On electrification: Currie corrects a historical context that has been widely misread. The rise of renewable energy and nuclear power stemmed from the energy security crisis of the 1970s, not from climate issues. The energy transition was proposed by Jimmy Carter in the 1970s, and its core focus was energy security. No matter how the narrative is packaged, the underlying logic of electrification remains unchanged, and the additional demand from data centers only reinforces this logic. On currency debasement: he believes that large-scale fiscal redistribution has accumulated enormous debts, which in essence is the continuous dilution of fiat currency purchasing power. The fiat monetary system was established only in 1971 and, in human history, is no more than an extremely short experiment. As gold prices keep rising, the share of gold in central bank reserves naturally increases, and the global monetary system is quietly drifting toward a quasi-gold standard.

Risks are also building up. The current capital expenditure pace of data center operators at the hyperscale level is reminiscent of the overexpansion by mining and oil companies in 2014, quietly sowing the seeds for the next round of capital misallocation.

As for how investors should allocate commodity exposure, Currie recommends that institutional investors set exposure at roughly 3%, because volatility is higher and even a small position can provide significant exposure. If investors have a higher tolerance for volatility, the allocation can be increased somewhat during a supercycle phase. Pure quantitative models based on the negative correlation between commodities and stocks would suggest allocating 20% to 30%, but he believes that ratio is too high.

In terms of investment vehicle selection, Currie places special emphasis on how crucial the futures curve shape is to actual returns—an aspect often overlooked by retail investors. When commodities become scarce, the futures curve takes a “backwardation” structure (near-term contracts are more expensive than far-term contracts). Each roll—buying the relatively cheaper far-term contracts and selling the more expensive near-term contracts—can contribute about 30% of the return on its own. The oil price itself is only part of the equation; the curve shape is equally important. Using the Russia-Ukraine conflict as a benchmark, he points out that although today’s oil prices are actually lower than they were then, investors who continuously rolled their positions still accumulated returns of 30% to 40%. Conversely, under a contango structure (far-term contracts are more expensive than near-term contracts), each roll results in a loss. This is the fundamental reason why some retail investors who bought the USO fund in 2009 and 2020 still recorded losses despite oil prices rising sharply.

Currie is currently working to build a new generation of commodities investment products, planned to be implemented via an active ETF structure or total return swap contracts. The core goal is to allow investors to maintain long exposure without having to deal with the cumbersome futures roll process themselves. He believes that existing mainstream products—including the Goldman Sachs Commodity Index (GSCI) and the Bloomberg Commodity Index—were designed dozens of years ago and have not undergone systematic updates for a long time. Anyone who has worked for 10 years on a commodities trading desk could build an index that delivers 10% higher returns than the GSCI. The focus of new product design is on how to preserve and capture scarcity premia and how to optimize the roll mechanism.

He says his role has undergone a fundamental transformation. During his 27 years at Goldman Sachs, his job was to tell the world what commodities are worth. Now he has founded 1947 Oil & Gas, which produces oil and natural gas in the Gulf of Mexico, and he personally holds these assets. This is a completely different angle for the conversation.

Follow me: Get more real-time analysis and insights on the crypto market!

#GUSD年化升至3.8% $BTC $ETH $SOL #Predict World Cup France vs Morocco #Trump Announced End of US-Iran Ceasefire