Dollar Extends Advance to Second Day as Metals Drop, Oil Sinks

Foreign investors poured into the U.S. corporate bond market in January, buying debt at the fastest pace in nearly three years. According to data from JPMorgan Chase & Co., a combination of stable yields and lower currency hedging costs made American corporate credit an irresistible draw.

This surge in demand provides a sharp counter-narrative to fears that a weakening U.S. dollar might scare away international capital. So far, the flow of foreign money into corporate bonds has remained strong.

January Saw a Surge in Bond Buying

JPMorgan strategists Nathaniel Rosenbaum and Silvi Mantri reported that average net inflows from foreign buyers hit $332 million per day in January, the highest level recorded since February 2023.

While the pace moderated in the final week of the month—dropping 59% from the previous week to an average of $240 million—the overall monthly trend pointed decisively upward.

"Despite the concerns that a falling dollar is a sign of foreign investors selling US dollar securities, what we are seeing in credit so far seems to suggest the exact opposite," Rosenbaum noted. He highlighted "renewed very strong buying from Asia to start the year."

Why the Dollar's Dip Didn't Deter Investors

The U.S. dollar had a challenging January. A Bloomberg gauge tracking the currency fell 1.3%, its worst monthly performance since last summer, driven by geopolitical shifts and speculation of intervention to support the Japanese yen.

Typically, a falling dollar erodes the returns for foreign investors when they convert their assets back to their home currency. However, other factors proved more powerful. Rosenbaum explained that wide interest rate differentials between the U.S. and other nations, including Japan, have kept currency hedging costs low. This dynamic effectively neutralized the risk of a softer dollar, keeping U.S. debt attractive.

Looking Ahead: A Potential Boom in AI-Fueled Debt

The momentum may be set to continue. Some Wall Street strategists are now predicting that corporate bond sales could reach record highs in February, driven by a rush to finance new artificial intelligence projects.

In a separate analysis, Rosenbaum's team projected that high-grade debt issuance from the technology, media, and telecommunications (TMT) sector could reach an unprecedented $400 billion in 2026 alone.

White House Engages Industry on Key Crypto Issues

The White House has entered direct talks with leaders from the cryptocurrency and banking industries to tackle a critical issue holding up a major digital asset bill: the regulation of stablecoin yields.

Officials from the Trump administration convened the meeting to find a path forward for the Digital Asset Market Clarity (CLARITY) Act, a piece of market structure legislation currently under review in the Senate. According to The Digital Chamber, a crypto advocacy organization, its CEO Cody Carbone was among the representatives who met with administration officials to hash out the bill's provisions.

The Digital Chamber confirmed the high-level meeting on X, highlighting stablecoin yield as a key issue for advancing comprehensive market structure legislation.

The CLARITY Act’s progress stalled in January after the Senate Banking Committee postponed a scheduled markup session. Lawmakers are still grappling with several complex topics before they can advance the bill, including:

• Tokenized equities

• Decentralized finance (DeFi)

• Ethics for elected officials investing in crypto

• Stablecoin rewards

Carbone described the White House meeting as "exactly the kind of progress needed" to resolve one of the bill's most significant obstacles. He added that he is "optimistic that as we continue to dive into the policy details, a fair playing field can be created for digital assets in the US."

This positive sentiment was echoed by White House crypto adviser Patrick DeWitt, who called the discussion "constructive, fact-based" and "solutions-oriented." He expressed confidence that officials and industry leaders would reach a solution soon. Other organizations present included the Crypto Council for Innovation, the American Bankers Association, and the Blockchain Association.

Navigating the Senate's Legislative Process

The high-level meeting occurred amid a partial US government shutdown, which entered its third day after lawmakers failed to agree on a funding bill.

The path for any crypto market structure bill is complex. The Senate is working through two separate but related legislative efforts that will eventually need to be reconciled.

Last week, the Senate Agriculture Committee passed its version of the bill, which focuses on the Commodity Futures Trading Commission's role. However, it did so without any Democratic support, as some members raised objections to rules concerning elected officials holding digital assets.

Meanwhile, the Senate Banking Committee is handling the sections of the bill that define how the US Securities and Exchange Commission will oversee the crypto space. For the legislation to reach a full floor vote, both committees will likely need to combine their respective bills into a single, cohesive package. The recent White House discussion signals a coordinated effort to clear the hurdles preventing that from happening.

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.