Crypto Bill Hinges on White House Stablecoin Talks

President Donald Trump announces the new initiative from the White House.

President Donald Trump announced the creation of a U.S. critical mineral reserve late Monday, a move designed to reduce America’s reliance on China for materials vital to modern industry. The announcement immediately boosted the shares of domestic mining companies in after-hours trading.

The initiative, dubbed "Project Vault," will establish a strategic stockpile of critical minerals specifically for the U.S. private sector. According to a White House official, the plan is backed by a combination of $1.67 billion in private capital and a $10 billion loan from the U.S. Export-Import Bank.

The core objective is to secure a domestic supply chain for materials essential for electric vehicles, advanced defense systems, and other critical technologies, directly challenging China's dominance in the sector. The proposal was first reported by Bloomberg News earlier on Monday.

Miners Rally on Stockpile News

Investors reacted positively, betting the initiative will spur domestic demand and unlock government-backed financing for American mining operations. Key movers in extended trading included:

• MP Materials: The operator of California's Mountain Pass mine saw its shares climb over 2%.

• USA Rare Earth: The company's stock jumped by more than 2%.

• Critical Metals Corp.: Shares rose by over 1%.

Washington Deepens Its Role in the Minerals Sector

Project Vault builds on a trend of increasing government intervention in the critical minerals industry. This strategic shift is highlighted by several recent developments.

USA Rare Earth has already engaged in discussions with Commerce Secretary Howard Lutnick, presenting its domestic mining and magnet production assets. These talks have led to a proposed deal that could provide the company with approximately $1.6 billion in funding, subject to certain conditions, and would also include an equity stake for the U.S. government.

This follows a landmark agreement made last summer between the Department of Defense and MP Materials. That deal involved the government taking an equity stake, setting a price floor for minerals, and committing to a long-term purchase agreement for a specific quantity of rare earth minerals and magnets.

NVIDIA ALTERNATIVES

NVIDIA ON THE MOVE

Source: Reuters

A new Federal Reserve survey indicates that banks are gearing up for a surge in business loan demand across all categories this year. Lenders largely attribute this optimism to expectations of lower interest rates and a rise in corporate spending and investment needs.

A Mixed Picture in Late 2023

The Fed's quarterly Senior Loan Officer Opinion Survey detailed a divided market in the fourth quarter. While demand for business loans from large and medium-sized companies increased, demand from small firms remained flat.

On the consumer side, households showed weaker demand for most types of loans. The notable exception was credit card demand, which held steady.

Lending Standards May Have Peaked

Although banks continued to tighten their lending standards for businesses in the fourth quarter, the survey suggests this trend is unlikely to continue. Most institutions reported that they do not expect to tighten standards further in the coming year, potentially removing a significant barrier to credit growth that was present in 2023.

One standout finding revealed a new lending preference: banks reported they are more likely to approve loans for firms with high exposure to artificial intelligence.

Context for the Fed's Policy Stance

This survey was available to Federal Reserve policymakers during their recent meeting, where they decided to hold the benchmark short-term borrowing rate in its 3.50%-3.75% range. The Fed signaled that a stabilizing labor market and persistent inflation would likely delay any rate cuts, a decision informed by data like this report on credit conditions.

Former Texas congressman Ron Paul has issued one of his starkest warnings yet, arguing that the U.S. financial system is flashing red alerts that are louder, faster, and harder to ignore than ever before. In a recent interview with David Lin, Paul claimed that decades of unchecked government spending and monetary expansion are culminating in a crisis of confidence for the U.S. dollar.

According to Paul, the current environment is fundamentally different from past debt scares. He contends that the nation has not only consumed a vast amount of its wealth but has also squandered its credibility through reckless fiscal and foreign policy.

The Core Problem: A $38 Trillion Debt Spiral

At the heart of Paul’s concern is the ballooning federal debt, which has surpassed $38 trillion. He views this not as a simple accounting issue but as a deep structural failure. In his analysis, the government no longer funds its obligations with real savings but instead relies on continuous money creation.

"They don't have the money," Paul stated, explaining that the system functions by "stealing the purchasing power of the dollar by increasing the money supply." This process, he argues, amounts to a quiet transfer of wealth from ordinary citizens to the state.

How Inflation Widens the Wealth Gap

This constant creation of new money is the primary driver of widening income inequality, according to Paul. Those who receive the new money first—large financial institutions and politically connected entities—benefit before prices rise. Meanwhile, the wages and savings of the middle and lower classes are eroded by the subsequent inflation.

Paul describes inflation as a hidden and damaging tax. "The poor are being hurt the most," he noted, suggesting that this "inflation tax" is more destructive than direct income taxes.

Gold's Price Surge: A Verdict on Fiat Currency

Paul directly connects these systemic pressures to the dramatic rise in the price of gold. With the precious metal trading near $5,000 per ounce at the time of his interview, he sees its sharp movements as a clear signal of collapsing confidence in government-issued fiat currency.

"When you see gold going up over $100 in a day… it is different," he said, admitting that even he has been surprised by the recent speed of the market's reaction, despite having warned of this outcome for decades.

When asked if the fiat system is nearing its end, Paul was unequivocal. "Yes, it is dying," he said, aligning with recent comments from investor Ray Dalio that the current monetary order is breaking down. Paul emphasized that the debt trajectory alone makes the system mathematically unsustainable.

He also revisited his long-standing prediction that gold could reach $20,000 per ounce, framing it not as a bullish forecast but as a reflection of the dollar's potential collapse. "It went from $20 to $200 to $2,000," he said. "There's going to be another zero in our lifetime."

However, Paul added a crucial caveat: the system may not even survive long enough to see such a price. In a complete monetary breakdown, he explained, quoting prices in dollars would become meaningless.

Beyond the Market: Social and Political Fallout

The consequences of this instability extend far beyond financial markets, Paul warned. He argued that as governments struggle to manage the ensuing chaos, civil liberties often become the first casualty. He pointed to growing constraints on free speech as evidence that economic stress makes authoritarian responses more probable.

This financial fragility also has geopolitical implications. Paul suggested that alliances like NATO could become ineffective if the U.S. dollar loses its global dominance. "If you run out of money, you have to change your mind," he remarked, noting that financial exhaustion, not diplomacy, is often what brings wars to an end.

A Glimmer of Hope?

Despite the grim outlook, Paul expressed cautious optimism about a shift in public awareness. He observed that younger generations seem more open to the ideas of Austrian economics and are increasingly skeptical of centralized monetary control. He credits the internet with helping to spread these alternative viewpoints.

Now hosting the Ron Paul Liberty Report, he continues to argue that debt liquidation and monetary reform are inevitable. However, he stressed that the path forward will not be easy. "This shift… is very, very dangerous," Paul concluded, warning that the risk of social disorder only grows the longer policymakers avoid confronting the underlying problems.

The U.S. Treasury has slightly lowered its borrowing estimate for the first quarter, now expecting to raise $574 billion, a $3 billion decrease from its November forecast. The revision comes as a larger opening cash balance helped cushion a projected decline in net cash flows.

Alongside its first-quarter plans, the Treasury announced it expects to borrow $109 billion in the second quarter. The department aims to maintain a cash balance of $850 billion by the end of March and increase it to $900 billion by the end of June.

First-Quarter Financing Breakdown

While the headline borrowing figure for the current quarter is down, the adjustment is primarily due to the higher-than-anticipated cash on hand at the start of the period. When this factor is excluded, the borrowing estimate is actually $19 billion higher than projected in November.

Analysts noted that the updated forecasts signal continuity. "The estimates reflect little change from November and, thus, present little risk of any changes to coupon auction sizes in the near term," wrote Thomas Simons, chief U.S. economist at Jefferies, in a research note.

Reviewing the Fourth Quarter of 2025

In the final quarter of 2025, the Treasury borrowed $550 billion in privately-held net marketable debt, concluding the period with a cash balance of $873 billion.

This was a departure from its November estimate, which had projected $569 billion in borrowing against an assumed end-of-December cash balance of $850 billion. The $20 billion reduction in borrowing was attributed mainly to stronger-than-expected net cash flows, moderated by the higher ending cash balance. Excluding the cash balance effect, actual borrowing was $42 billion lower than initially announced.

Market Awaits Key Refunding Announcement

With the latest borrowing estimates released, the bond market's attention is now fixed on the Treasury's quarterly refunding announcement scheduled for Wednesday. This release will provide concrete financing plans for the first and second quarters.

The consensus expectation is that the Treasury will hold its note and bond auction sizes steady for the eighth consecutive quarter.

Investors will be watching closely for any guidance on the department's next moves. Key questions include whether the Treasury will offer more details on future increases in coupon issuance or if it might signal cuts in long-end issuance. A reduction in long-term debt sales would align with the Trump administration's stated goal of lowering long-term borrowing costs.

However, analysts believe a policy shift is unlikely for now. "There is no reason to expect that the Treasury will cut back on coupon issuance any time soon," Simons commented. He added that while Treasury Secretary Scott Bessent has previously expressed a desire to reduce long-end issuance, "there are still too many unknowns in the outlook to justify reducing coupon auction sizes."

A sweeping trade deal announced by U.S. President Donald Trump and Indian Prime Minister Narendra Modi aims to redirect global crude oil flows, but the plan is poised to collide with the fundamental laws of market economics.

Following tense negotiations, the agreement includes a commitment from India to purchase over $500 billion worth of U.S. energy, technology, and agricultural products. In exchange, the U.S. will lower its tariff on Indian goods from 25% to 18%.

A key component of the deal involves India, the world's third-largest oil importer, ceasing its purchases of Russian crude. Instead, it will buy "much more" oil from the United States and potentially Venezuela. While the pact serves clear U.S. strategic interests, its real-world execution faces significant economic headwinds.

The Geopolitical Goals of the Trade Pact

This agreement advances two major White House objectives.

First, the administration seeks to revitalize Venezuela's struggling oil industry. This follows Washington's move to take effective control of the country's oil sector after the seizure of President Nicolas Maduro last month.

Second, the deal is designed to tighten the economic squeeze on Moscow. By pushing Russian crude out of Asia—one of its last major markets following Western sanctions over the war in Ukraine—the Trump administration hopes to further limit Russia's export revenues.

The pact underscores a willingness to use U.S. geopolitical influence to shape global markets. However, political directives often struggle to override powerful market incentives.

Venezuela's Oil Output Poses a Major Hurdle

Efforts are underway to revive Venezuela's energy sector, including moves to sell up to 50 million barrels of crude, reform hydrocarbon laws to attract investment, and ease some sanctions. Asia, particularly China and India, might seem like a natural destination for this oil. China bought over half of Venezuela's crude exports last year, and India was a major buyer before Trump imposed a 25% tariff in March on countries purchasing Venezuelan oil.

Despite this, several factors limit Venezuela's ability to become a dominant supplier to India.

Production and Export Constraints

Venezuelan oil production remains limited at around 900,000 barrels per day (bpd) and is expected to take months, if not years, to recover fully. Although exports jumped to approximately 800,000 bpd in January from 498,000 bpd in December, sustained growth is needed to clear stored inventory and reverse previous production cuts.

Figure 1: Venezuelan crude oil exports by destination, showing China as the primary buyer and fluctuating total volumes from April 2024 to January 2026.

The Economics of Sanctioned Crude

The more significant issue is simple economics. Venezuelan oil was previously attractive to Asian buyers primarily because sanctions forced it to be sold at steep discounts.

Recently, when cargoes of heavy Venezuelan crude were offered to Asian buyers at a $5 per barrel discount to the Brent benchmark, they were rejected. Traders noted the markdown was insufficient to make the heavy, sulfurous crude competitive with other available grades. Unless Venezuelan output rises so much that U.S. refiners cannot absorb it—forcing producers to offer larger discounts—Asia is likely to remain a marginal market.

The Challenge of Shifting India to US Crude

Pivoting India toward U.S. oil presents its own set of challenges. Last year, India's price-sensitive buyers purchased an average of only 320,000 bpd of U.S. oil, valued at around $7.5 billion. A significant increase appears unfeasible due to higher freight costs and the fact that the U.S. government has limited ability to control private market dynamics.

Russia's Price Advantage Remains a Powerful Lure

India, once the top buyer of discounted Russian crude after 2022, did reduce its purchases after the Trump administration doubled duties on Indian imports to 50% in August. This was followed by U.S. sanctions on Russia's top oil companies, Rosneft and Lukoil, in October and new EU restrictions on fuels made from Russian crude.

As part of the new trade deal, the White House confirmed it will drop the additional 25% tariff.

Figure 2: Indian monthly imports of Russian crude oil, illustrating a peak in mid-2025 followed by a decline into early 2026, though volumes remain significant.

Even with past pressure, India imported 1.2 million bpd of Russian crude in January, accounting for over a fifth of its total imports. While this is down from the 2025 average of 1.7 million bpd, it is far from zero. The primary reason is the compelling price.

Russian oil is currently being offered at a discount of more than $20 to Brent—the steepest markdown since April 2023. While Indian refiners heavily focused on exports to Europe, like Reliance Industries' Jamnagar complex, are unlikely to resume large-scale Russian purchases due to EU rules, refiners serving India's domestic market will find such discounts difficult to resist.

Market Forces Will Have the Final Say

Ultimately, economics will likely prevail over politics. While the U.S. wields significant influence, even President Trump cannot single-handedly steer crude flows in a highly liquid and transparent global oil market.

New Delhi may also push back against U.S. pressure to prioritize lower domestic fuel prices, a critical issue for any government. In the end, price signals—not political directives—will determine the final destination of Russian and Venezuelan oil barrels.