Gerardo Del Real,
Editor
July 16, 2025
The 2025 bingo card is official this year for some good and not so good reasons.
I’ll start with this morning’s headline: Financial news outlets are reporting that President Trump has drafted a letter to fire Fed Chair Jerome Powell.
Markets reacted by dumping the dollar, sending gold, silver, platinum, and palladium ripping. They were going to rip anyway… but this is adding fuel to an already scorching fire.
Central banks are continuing to diversify away from the dollar for the same reason Trump has such urgency to get a Fed Chair in place that’ll do his bidding: the $7 trillion in debt that has to be refinanced this year.
Mind you, the administration just passed a bill that will add trillions to the $37 trillion deficit we already are struggling (can’t) to pay down.
But worry not, rich people and corporations (same thing) get tax breaks… while waiters and waitresses get to avoid tips being taxed for three years. Yay!
Don’t worry rich people, (not being a hypocrite; that’s me too but I didn’t vote for the bill) — our tax cuts are permanent.
Back to the dollar and the bond market.
It’s no coincidence that legendary investor Stanley Druckenmiller, who made a billion dollars for the Quantum Fund by breaking the Bank of England in 1992, is making a big bet that America is the next currency to break.
According to Marketwatch, last November, he told an interviewer that “my current bear position [in Treasurys] is about 25% of net asset value” — meaning that 25% of his portfolio’s NAV was allocated in this way.
Fun fact, current Treasury Secretary Scott Bessent was his underling back in the Bank of England days. The Marketwatch article goes on to highlight the last losing year Druckenmiller had managing money. That would be never!
I won’t bore you with the details of the trade (read the article if you want them) but the bottom line is that there’s BIG money betting against the U.S. dollar. And today’s announcement that Powell may be on the chopping block is not likely to inspire confidence.
No one knows whether Trump fires Powell or not; heck I don’t think he knows yet and my hope is that the market reaction informs some reason.
There is one thing this administration deserves credit for, and that is the acceleration and expansion of initiatives that were in the comically named Inflation Reduction Act as it relates to the mining industry.
This administration has done a brilliant job of creating a framework to establish independent critical metals supply chains.
The Department of Defense just announced a multi-billion-dollar deal with MP Materials; a deal backed by JPMorgan, Goldman, and the DoD.
The deal is a 10-year public-private partnership with MP Materials to build a fully domestic magnet supply chain. That includes a second U.S. magnet plant and expanded heavy rare earth separation at Mountain Pass.
DoD will become MP’s largest shareholder, converting $400 million in preferred stock and holding warrants for more.
It guarantees a NdPr floor price of $110/kg for 10 years — ensuring MP gets paid even if China dumps prices.
And it commits to buying 100% of the magnets from the 10X Facility (a planned second rare earth magnet manufacturing plant by MP Materials) through 2038. There’s also a $150M DoD loan and the $1B in private financing lined up from JPM and Goldman I mentioned.
Could this spill over to uranium, lithium, copper? We’ll see… but the precedent has been set.
I suspect the bingo card will continue to surprise. I hope there’s more of these types of surprises in the critical metals column.
Brilliant stuff!
Let's get it,
Gerardo Del Real
Editor, Daily Profit Cycle