Greetings Speculator,

This is The Next Big Rush, your daily drop of mining/energy investing news. Where we come together and thank the Lord above we're not banking with SVB.

Here are the crisis points:

🫡 Gold Gets Lift From SVB Fiasco

🫡 EU And USA To Join In Critical Minerals Effort

👍🏻 Gold Gets Lift From SVB Fiasco

On the only day of the month we failed to report the gold price - yesterday - the Silicon Valley Bank fiasco ended up teaching us all a tough lesson. Nowhere is safe - except for maybe gold (bitcoin will not be mentioned because we don’t want to be stoned to death).

The story in a few punches:

• Bank deposits grew massively during Covid.

• Due to client base being mostly startups, there were few ways to make money directly from such clients.

• Bank “had to” go and buy treasuries at close to all time low rates. No hedges because "reasons". (We think the reason is their Chief Admin Officer was CFO at Lehman Brothers so had vast experience in imploding banks).

• Rates rose a full 450 basis points in the last year. They would lose more than a billion dollars every time interest rates went up 25 basis points. 

• Maturity of bonds versus deposits (due to Tech slowdown) meant that the bank became illiquid, which spooked markets when they abruptly had to go to the market for a raise. 

• VCs advised companies to pull everything out of the bank.

• Stock crashed.

• Full on bank-run.

• The Feds shut the bank. No transfers, no payroll, no access to funds.

• FDIC comes in and promises to make good on 250k per account.

• Only 3% of accounts fully covered by FDIC insurance since these companies held millions in working capital.

• VCs en masse asking for a bailout.

• Oh, and the CFO, CMO and CEO sold double digit portions of their holdings a couple of weeks ago.

Ever seen that before?

(You're a junior mining investor, this is highly rhetorical).

Gold shot up 1.65% to close at $1867.30. Even silver, the metal the paper markets love to hate, was up a generous 2.22%

The only question that’s left is whether we will learn the Fed is willing to come in and bail the bank out.

Come on, gold bugs, now it’s our your time to shine! 

💪🏼 USA And EU Partner For Critical Minerals

On Friday, President Joe Biden and European Commission President Ursula von der Leyen agreed to launch talks on critical minerals used for electric vehicles amidst trade frictions between the United States and the European Union.

The meeting at the White House also discussed European complaints regarding clean energy subsidies in the U.S. Inflation Reduction Act (IRA) and the war in Ukraine. The IRA, which offers massive subsidies for U.S.-made products to address the climate crisis and promote renewable energy, has caused European anger.  🤬 

However, the Biden administration aims to address European concerns while adhering to the core tenets of the law - or so they claim.

In a joint statement, the two leaders said they intended to "immediately begin negotiations on a targeted critical minerals agreement" to ensure that minerals extracted or processed in the EU would count for clean vehicle tax credits under the IRA law.

Both leaders emphasized the strength of their partnership and unified support for Ukraine and efforts to hold Russia accountable for its invasion.

The European Commission responded to the U.S. IRA law by presenting its Green Deal Industrial Plan last month with increased levels of state aid to help Europe compete as a manufacturing hub for clean tech products.

Let’s see what these two will cook up. 

Memes Of The Day

The Editor

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.