Nick Hodge,
Publisher
July 8, 2025
Editor’s Note: We are financing a new 3-cent copper company this week in Private Placement Intel. We’ll be going in alongside legendary resource investors Rick Rule and Jeff Phililps. You can join Private Placement Intel now to participate at the still-discounted rate of $2,025 per year. Or call Jimmy Mengel in Customer Service at 844-334-4700 for more information. —Nick
The US may be the best country on Earth, but its currency is dropping like charcoal into the grill.
Passage of the big beautiful bill will add an ugly $3-$5 trillion to the already insurmountable US debt. More debt means more dollars, which means more supply. The M2 money supply is reaching all-time highs as you read this.
At the same time, there is less dollar demand for all the reasons you know: weaker credit ratings, global de-dollarization, etc.
While the administration and the Fed are desperately trying to change this, the chart doesn’t lie.
We recently saw passage of the Genius Bill that will foster more demand for Treasuries from stablecoin operators.
The Fed also recently changed rules on the Supplementary Leverage Ratio (SLR) — a rule that requires big banks to hold a minimum amount of capital relative to their total assets, including safe ones like U.S. Treasuries.
By lowering the capital buffer (from 5% to between 3.5% and 4.5% for the largest banks), the Fed is making it easier and cheaper for banks to hold Treasuries. Under the old rule, Treasuries were treated just like risky loans or junk bonds when calculating leverage. That discouraged banks from buying more of them because doing so increased their required capital.
Imagine a bank had $100 billion in assets, including $30 billion in Treasuries. Under the old rule, the bank had to hold at least $5 billion in capital — even if a big chunk of those assets were ultra-safe. Now, with the buffer reduced, the bank only needs $3.5–$4.5 billion, freeing up capital to buy more Treasuries or make more loans.
This could boost demand for Treasuries, lower yields, and help the government finance its growing debt more affordably. But critics warn it may also weaken financial stability if banks become too leveraged in a volatile environment.
In this way, the Fed and the administration are aligned.
But at the same time, President Trump and some of his department-head allies are also making a very public display of trying to replace Powell with someone who will kowtow to their rate-cut wants. This undermining is also undermining faith in the dollar.
In the very simplest of macro terms, when the dollar goes down, assets that are priced in it go up. That’s why we’re hitting new highs in the S&P alongside Bitcoin and copper. And it’s why other things like PGMs and uranium are moving higher as well.
Make sure you’re exercising your freedom to profit from inept government and policy. Do that by being independent from fiat and owning assets priced in it.
Hope you had a Happy Fourth!
Keep coming back,
Nick Hodge
Publisher, Daily Profit Cycle