Tavi Costa: New Highs for Silver are the Next Step in this Market

In this podcast interview, Tavi Costa from Crescat Capital discusses the emerging bullish cycle in the metals and mining sector, highlighting several key macro trends and investment opportunities. Costa believes we are in the early stages of a long-term commodity cycle, with gold leading the way and other metals poised to follow. The discussion centers on three primary pillars: energy sources, infrastructure, and raw materials. Costa argues that the increasing electricity demand, driven by artificial intelligence and onshoring trends, will create significant opportunities in metals and mining. He emphasizes the critical need for metals to support emerging technological and infrastructure developments, particularly in the United States. A pivotal moment Costa highlights is the U.S. Department of Defense's 15% stake in MP Materials, which he sees as a recognition of strategic material vulnerabilities. This investment signals a potential shift in how governments view critical resources and mining infrastructure. Costa also discusses the potential macroeconomic trajectory, suggesting two potential paths: a deflationary shock or an inflationary era followed by a highly efficient, deflationary period driven by AI. He believes we are currently in an inflationary buildup phase that will eventually transition to increased productivity and efficiency. Regarding currencies, Costa anticipates a long-term decline in the U.S. dollar versus other currencies, driven by significant fiscal and trade deficits. He sees this as part of a broader "domino effect" of macro trends, where acceptance of risk gradually moves through different asset classes and markets. The interview concludes with Costa identifying the exploration and development phase of the mining industry, alongside emerging markets, as potentially the most asymmetric investment opportunities of his career. He encourages investors to pay attention to the interconnected nature of these macro trends and the gradual rotation of capital across different sectors and geographies.