Bombing the Bear and Budgetary Wolf Bait – Bob Moriarty & Richard Mills

Rick Mills, Editor/ Publisher, Ahead of the Herd:

Bob is there any similarities between the crisis going on in the global economy comparable to 2008?

Bob Moriarty, Founder, 321gold:

Strangely enough this is a mutation, what it most closely resembles is the long-term capital management collapse in 1998, but it has elements of the 2008 crash.

This started in Japan with the collapse of the bond market there and Japanese interest rates shooting through the roof and causing a crash in derivatives, which is identical to 1998. And the key, I’m glad you asked the question, is that this is not something that starts and stops, it’s something that starts and goes on for many months, even a year, so I think we’re going to see a massive stock market crash but into October.

It has all the elements of 2008 but with too much debt, too many loans, and poor economics. Europe is collapsing so it’s a combination of long-term capital management and the GFC in 2008, and it has some of the worst aspects of both.

RM: You’ve got shared economic conditions for 2008 and 2025; they share many of some key similarities. But your right they are not identical, the ‘08 crisis was primarily being driven by a housing bubble and related financial instability, while today’s scenario is a broader range of factors, much higher debt and deficit being added to at an amazing clip and global inequality.

It’s a repeating cycle, I look at the collapses in late ‘90s, 2008 and 2020 and everything seems to be coming back to the bond market’s uncertainty and its reaction to the increasing debt load. And the way bond markets react to that uncertainty is by increasing the yields.

The bond market is the most important market in the global economy; it’s the tail that wags the dog. Former Fed Chair Alan Greenspan said whose president, and elections, don’t matter because globalization has caused the financial markets to be the most dominant factor and presidents are forced to listen to the financial markets.

Greenspan also said we are fortunate, thanks to globalization policy decisions in the US have been largely replaced by global market forces and security concerns aside, it hardly makes any difference who will be the next president. And that was before 2007 when the financial crisis hit, that’s quite the narrative to tell people.

BM: Well, it’s a very accurate narrative. Donald Trump thinks he has 10 times more power than he does, and he doesn’t understand economics at all. Some things like this Build Back Better bill of his is an utter disaster, the United States is functionally bankrupt, and Elon Musk has pointed out something that everybody who passed Economics 101 would recognize: you cannot have $37 trillion in funded debt and $200 trillion in unfunded debt and keep spending money.

And no question about it, if that bill passes the Senate which I don’t believe for minute that it will, it would be the final nail in the financial-system coffin.

RM: The funny thing about the debt is everybody talks about the debt today and how much Biden added ($8.2) and how much Trump added ($7.8), but the fact is that after the shock in 2007 the increase in Treasury liabilities between 2008 and 2015 was $9 trillion.

You look at the leverage of the bond markets before that and you look at it after that increase, between Trump’s first admin and Biden’s presidency $16.2T was added to the debt. You sit here and you’ve got to be thinking Washington is totally out of control.

BM: Worse.

RM: Economists Carmen Reinhart and Ken Rogoff talked about the fear of the bond market, what they were warning us about was that once debt reached critical levels, 90% of GDP or above, there was a risk of a sudden shifting of market attitudes.

U.S. Treasury Fiscal Data already indicates a US debt to GDP ratio of 123%.

The Congressional Budget Office says this ‘Big Beautiful Bill’ would add $2.4 trillion to the deficit and increase debt by nearly $3 trillion, or roughly $5 trillion if made permanent.

The US is at 123%, they’ve got the world’s reserve currency, what we could be looking at is almost unthinkable.

BM: We’re there. I read an article today where somebody analyzed the actual unemployment rate in the United States, he said this is nonsense talking about whether we’re going into a recession, we’re not in a recession. We’re in a depression and the actual unemployment or under-employment rate is about 24%. Certainly what Donald Trump has done with the tariffs wants to kick us over the edge into the canyon below.

There are things going on under the surface that very few people see, the European governments are screaming because when China cut off the rare earth elements and the magnets it literally stopped all large manufacturing. You can’t build cars, you can’t build excavators, you can’t build anything without these magnets.

Trump started threatening China, China looked and said, “What can we do to stop this trade dispute, well all we have to do is shut off the rare earth elements and the magnets and the world’s economy stops.”

Now here’s where it’s really dangerous. If Trump turned around and got reasonable tomorrow and talked to China, talked to Mexico and said, “Okay we’re going to go back to where we were and we want to make sure we’re reasonable but go ahead and fire up your economy.,”

There are no ships coming to the United States. Canada is talking about finding new markets for aluminum and steel because they realize they can’t depend on the United States. Donald Trump has committed hara-kiri for the US economy.

RM: Historian Niall Ferguson said this on Fox TV to an American audience. At the time was thinking about the collapse of the Soviet Union and he made the same point, “A world power can be brought down by financial excess with catastrophic speed.”  At the end of it he said, “the pigs are us” and this is something that’s coming, I don’t think that Trump is going to back off or stop this and the damage has been done. Do you agree with that?

BM: It wouldn’t make any difference what Trump does, what he has already done has destroyed the US economy and the dollar and if you look at the price of gold, the price of silver and the price of platinum, both silver and platinum have broken out. Platinum’s up almost $400 in the last month okay, so the rest of the world sees it.

Europe is in an absolute panic because they’re seeing their industries literally shutting down. The number of car manufacturers in Europe and in the United States who are stopping lines because they can’t get parts is growing daily. We’re not headed for a catastrophe; we’re in a catastrophe.

RM: People wonder, the bond market, how can that push whole countries around, well the biggest players in the bond market are global asset managers like PIMCO, BlackRock, Franklin, Fidelity, Vanguard, JP Morgan and the Bank of New York, Mellon, Goldman Sachs and on and on. They have formidable firepower; the largest of these guys manage portfolios comparable to the sovereign debt of most large European countries you just mentioned.

The world’s hedge funds, Bridgewater, JPMorgan, Paulson, BlackRock again, Soros and on and on, they exercise huge leverage over the markets. These people are aggressive, look at what happened in 2011 with the bond king, Bill Gross, he’s one of the biggest bond vigilantes and he attacked the federal government about the deficit.

He told ‘The Atlantic’ magazine, “Sale of Treasury bonds is the easiest way of staging a mini revolution” and that’s what we’ve got going on today. Bond vigilantes do not like the global debt, and they specifically do not like the way US debt and deficit is trending, and they hate this Big Beautiful Bill of Trump’s.

BM: What they’re doing is they’re acting in their own self-interest and that’s the way capitalism is supposed to work, it tends to be self-correcting and when I was talking about Trump’s knowledge of the economy, Trump simply doesn’t know very much about economics, and he conducts business like a mafia don.

Frankly it can’t work as President of the United States and people are turning, and for Elon Musk to come out and break the relationship and say, “look, this is a terrible bill,” well everybody knows it’s a terrible bill because it increases the debt.

We haven’t even talked about the geopolitical events, but the geopolitical events are forcing people into safe havens. Now traditionally, and this goes back to stagflation, the bond market started a bull market in 1980 that lasted 45 years, but it’s over now. We’re in a bear market for bonds and that’s going to last at least 20 years.

RM: There’s a lot of reasons to be excited about the junior resource market. There has been a lack of institutional and retail buying, money hasn’t really begun to flow down to the start of the mining food chain. The major miners have been under-investing for a decade, there’s been a dearth of new discoveries and in the developed world it can take close to 30 years to go from discovery to mining.

Now there’s a lack of global mining reserves and so there’s going to be a huge increase in M&A, has to be. What these majors want when they move down the food chain, they want scalability. That’s something that’s the most important to them. They want something that’s large enough, that’s going to be long-lived enough that they can go in and spend the money and make a difference in their bottom line.

And then you take another look at where things are going and you look at the way Trump – and I’ve got to applaud President Trump for this – what he’s done with taking over the critical metals, he’s fast tracking permitting, he’s a big fan of mining, he’s a big fan of security of supply for the US and I applaud him for that.

So, you’re looking at the US becoming a great place to mine. It never was under the Democrats, sure they talked a good game, but the goal was to friend shore, you mine, one idiot said anyone can mine, and we’ll do the big money manufacturing. And all the while slapping hundreds of new regulations on the sector. The Republicans have started so many good initiatives and projects, so you look at the United States as a whole and then you want to pick Alaska because they get it.

You look at Alaska and there’s been an executive order singling it out, there’s been many other executive orders that directly affect mining investment in Alaska.

I really like Alaska right now and we’re going to talk about a couple of great projects that are in Alaska, one’s already on the Fast 41 dashboard, and the other one has the critical minerals that could probably get them there. So, we’re going to talk about two Alaskan stocks today.

BM: Yes.

RM: Okay, the first one we’re going to talk about is one that I think is one of both our favorite silver stocks, and it’s Silver47. It trades on the TSX Venture as AGA. Why don’t you just start us off a little bit about that stock, Bob?

BM: This is a project that I’ve been part of for over 10 years. There was an Australian company called White Rock Minerals that had two projects in Alaska south of Fairbanks. And the VMS project has a 43-101 resource of about $5 billion.

Well, because of covid, White Rock Minerals failed to line up a drill crew in 2020, so they didn’t do anything. They took the money they had and went back to Australia. They had a couple of gold projects there, but the government changed the rules on deposits and caused White Rock to go into bankruptcy.

I was a big fan of this project in Alaska, so I talked to Quinton Hennigh, and I talked to some other people and strangely enough Silver47 had a very similar situation. They had a giant silver project in the Yukon and the Canadian government changed the rules, so they had structure, they had people, they had money, so they picked up the project in Alaska from White Rock Minerals.

It’s called Red Mountain; it’s got a resource of $5 billion. I think it’s 90 miles from Fairbanks, okay, there’s no issue whatsoever, they can put that into production with what they’ve got. But one issue, all these guys in northern Canada and Alaska suffer from the weather and they’ve got news six months a year and then they’ve got no news for six months a year. So Silver47 just did a deal with Summa Silver to create a merger, and Summa Silver has projects in Nevada and New Mexico and so there’s going to be news 12 months a year.

RM: We’ll get into Red Mountain, but your last point is very important, they did a deal with Summa Silver and the reality, I think for investors, is to look at it as a merger of equals.

There’s two ways you can grow a mining company: the first is through the drill bit. And the other is through mergers and acquisitions.

So why get bigger? Well larger companies attract more capital, they attract institutional investors and if you look at both companies, they’re still largely a retail story and that’s great but you need to get bigger. Getting bigger is better for all because you attract more capital and as we’ve said, this is a capital-intensive business.

They took a 20-day volume weighted average price preceding the announcement and then adjusted the share ratio. Both companies had pretty much the same market cap, but Silver47 had just raised a little bit of money prior to it, so it was a little bigger, but it works out to 44% and 56% percent on the exchange, that’s a 0.45 exchange ratio for Summa shareholders. Looking at the pro-forma share structure it’s about 126 million shares on a combined basis.

To me, market wise, it looks like a merger of equals, and when you start looking at the projects the fact that Summa has an Inferred and Indicated resource on one property, they have an Inferred resource on a second property (the third is new), I see it as a positive acquisition all around. And it does give Silver47 the ability to be doing drilling and having exploration survey results and assays, all year round.

BM: Well, here’s what’s interesting and you’ve mentioned it, but you haven’t highlighted it – this is not a takeover and 95% of deals are takeovers where somebody comes in and throws some money at another company and takes them over. This is a merger of equals with them holding almost the same about of shares percentage wise, 56% for Silver47 and 44% for Summa.

RM: Silver47’s CEO Gary Thompson thinks the big-scale, near-term opportunity in Summa is the Mogollon project in New Mexico. He’s been down there; he looked at the mineralization and the drilling, he’s studied the project and all the work that’s been done historically.

He says it’s like what you’d see in Mexico, but this thing’s in New Mexico, it’s exactly what you’d see in Mexico, which is a classic silver-gold vein district, but it’s in New Mexico, in the US and that’s fantastic. There’s been a lot of work done and there’s been some past production of high-grade gold and silver.

Mogollon has an Inferred resource of 32,000,000 oz of silver-equivalent; it grades 367 Eq grams per tonne; the grade’s good, metallurgical recoveries are 97% for silver, 98% for gold, and it’s interesting in that all of that work has been done on only 2.4 kilometers of these vein structures. There’s still 77 kilometers of vein structures of silver and gold that has not been drilled.

So, you go there this winter and focus on that 2.4 kilometers and you could get a meaningful growth to the resource. And then of course you have the whole vein field that hasn’t even been tested yet. Summa’s CEO Galen McNamara said, “the district is one of the greatest remaining vein fields left in the US,” and I think he might be right.

Their second project is in Nevada; it’s in the historic Walker Lane and it’s very close to Tonopah the Queen of the Silver District.

BlackRock Silver has 100 million silver-equivalent oz on the west side of the district and Summa has the east side of the district: they do have a resource on the Hughes, an Inferred resource at 33 million ounces of silver-equivalent and then there’s another 10 million ounces in the Indicated category so when I say it’s a merger of equals I’m not just talking about in the market, I’m talking about they’ve got some very impressive discovery potential plus they’re bringing in some resources, so I think the merger deal between Summa and Silver47 was brilliant.

The third project is Kennedy, now it’s new and not much work has been done. But they do know there’s 22km of gold and silver veins.

BM: Red Mountain has an extraordinary resource, Hughes has an extraordinary resource, Mogollon has potentials, so here’s what’s crazy: What’s the only other thing they need?

RM: They just raised almost $16m so it isn’t money.

BM: No, not money. The price of silver going up.

RM: Silver’s breaking out, platinum as well, as you mentioned a couple of weeks ago.

BM: Silver has broken out; we haven’t talked about this I don’t think. It’s China that’s driving the price of silver and platinum now. You have heard me talk many times about buying things just because they’re cheap. The spread between gold and platinum is the greatest it has ever been. The ratio between gold and silver is almost as high as it’s ever been.

So, if you believe you want to hold natural resources and precious metals because of insurance it would make sense to sell gold and buy silver and buy platinum. The Chinese government has been pushing, and I’m shocked at how well the price of gold has held, but yesterday and today made it crystal clear silver and platinum are the places to go.

There are very few pure silver companies out there. Most silver is produced as a by-product of copper or VMS deposits, Silver47’s Red Mountain is not a pure silver project, but it has 600 million ounces of silver-equivalent, so this is one of the cheapest ways to get in silver and silver’s going to be hot soon.

RM: I think retail and institutional investors are slowly going to slide down the food chain and come into these better juniors, and as I said the M&A, the mergers and acquisitions by the majors and the mid-tiers to replace their reserves because of the lack of investment is going to start to show up, too many years of underinvestment says the M&A wave has to happen.

Red Mountain is a different beast than the veins and what they’re looking at in New Mexico and Nevada. It’s VMS and SEDEX, they’re concentrating on VMS mineralization on the east side of the property and this property is unique because there are so many surface showings. The gossans are rusty rocks that are exposed at surface and there’s a lot of it; it’s basically weathering and oxidation of the sulfides and these are good first indicators for geologists.

And the other thing about these VMS deposits as well is they come in a string and when you find one, you’re bound to find another, and Silver 47 has two of them already, they think.

So, they’ve got $16m dollars to drill Red Mountain, 8 to 10,000 meters and the two target areas are the West Tundra Flats, the other one is called Dry Creek. These two are about 2.7 kilometers apart, so the question that they want to answer is do they connect? And then they’re going to drill and try to increase the resource that you were talking about Bob.

The project is in Alaska, there’s a push for critical minerals, they’ve got antimony, copper, silver, they’ve got gallium so you’ve got these critical metals, you’ve got the executive orders that Trump has signed, you’ve got a deposit that to me is shaping up to be of interest to a major because of the potential size and scalability of it, the prospects for Red Mountain appear pretty good.

BM: Well, here’s the deal: it’s got $5 billion of metal in the ground at today’s prices. Some of the things like gallium and antimony, those are on the Chinese restricted list, now we’ve talked about this before, but the White House evidently wants to start a sovereign wealth fund and obviously the mining business needs investment and what the juniors need more than anything else is some support from the government.

And there’s only three ways to create wealth: you can grow it, you can mine it, or you can manufacture it, so if Trump wants to increase wealth to the United States. he needs to get that sovereign wealth fund to start investing some money.

RM: I think we’ve pretty much cleared up Silver47. Did you want to move into our next one, it’s graphite in Alaska which is Graphite One.

BM: Actually, you know a lot about graphite and Graphite One, you should talk about that.

RM: That’s no problem at all because I’ve been involved with the company for 5 years. Anthony Huston, the CEO and founder of Graphite One (TSX.V:GPH) called and said he wanted me on board. That I was the guy to write about graphite, Graphite One and EV’s. He’d been reading my stuff on the sector for many years; I was first to be writing about Obama’s electrification of the transportation system back in ’09 and the coming Lithium-ion battery revolution and have been following the sector ever since.

Graphite is one of two minerals or metals that the military uses the most of, which are graphite and aluminum.

Some might be surprised at graphite being one of the two, but graphite is used in so many applications, it’s obviously heavily used in the in the military defense sector, it’s in the industrial sector and it’s in the civilian side of things.

And graphite acts exactly like rare earths, if you impact the supply the destruction to all the supply chains, because of an incredible multiplier effect, would be huge. Just given the multiplicity of aluminum and natural graphite’s applications, if either one of these supply chains was broken, you’d be into a supply deficit in a very short amount of time.

Particularly graphite, it’s one of 14 listed minerals for which the US is 100% import-dependent, it’s one of nine listed minerals meeting all six of the industrial defence sector indicators identified by a US government report, and it’s one of three listed minerals meeting all the industrial defence sector indicators.

Now the ugly thing about this is that China, as mentioned, supplies 100% of the refined graphite the US uses; so the US had no security of supply in graphite.

The reason I’ve always liked like Graphite One is because they were always targeting supplying all the graphite, and graphite products, the US needs. They’ve always been focused on fulfilling US graphite Security of Supply.

Now they have published a full feasibility study the DoD paid three quarters of, are on the Fast 41 Dashboard, the DoD is also paying for development of a new graphite fire fighting foam, and they just signed a first of its kind off-take agreement with Lucid Motors.

The US uses 60,000 tons of graphite a year, Graphite One’s Graphite Creek project is one of the largest, highest-grade graphite deposits in the world.

They just put out a Feasibility Study, they’ve started permitting, and in their Feasibility Study they can supply 160,000 tons of natural battery-grade graphite to the US. So, this one mine alone can solve the US graphite security of supply issue for a long time to come.

BM: That obviously could be very valuable. Where do they stand about going into production?

RM: The governor of Alaska Mike Dunleavy said that they could be in production by 2029. It’s amazing the political support they have. They have the governor, they have both senators, they have the congressmen all backing this project and have since long before I was around. And now they’ve got President Trump signing executive orders, fast-tracking critical minerals in Alaska.

We talk about risk in this business all the time, but the two we’re talking about today, Silver47 is in a post-discovery building a second resource-estimate stage; that takes a lot of risk out of it. You look at Graphite One and it’s been de-risked; it’s got so much political support, the Department of Defence paid three-quarters of the Feasibility Study. There doesn’t seem to be any other answer for the US’s shortage of graphite.

BM: No, it’s a good solution.

RM: Let’s look at one more thing that Graphite One has done. In Warren Ohio, in the middle of ‘Voltage Valley,’ they’re going to build a factory that EXIM [Bank] has a letter of intent to finance up to $320 million. GPH wants to build a plant that is going to manufacture graphite products – first from synthetic and then from Graphite Creek’s natural graphite.

It’s going to make various product from graphite. They’re going to be making various graphite products and anodes for lithium batteries and that’s what the deal with Lucid is all about. I think the future of Graphite One is very bright.

BM: Yes.

RM: Let’s switch to the Big Beautiful Bill that Trump’s trying to muscle through Congress, did you know it contains an obscure tax measure that’s setting off alarms on Wall Street and beyond?

BM: Yes.

RM: It was buried deep, section 899, it’s called Enforcement of Remedies Against Unfair Foreign Taxes. It calls for increasing tax rates for individuals and companies whose tax policies the US deems discriminatory. Now they can raise tax rates on passive income like interest on dividends, capital gains, we’re talking bonds here and investing in US stocks.

And the same people that we were talking about earlier, the global asset managers and the bond vigilantes and the hedge funds they’re saying it’s a revenge measure.

Of course it is also going to impact investors; including sovereign wealth funds, pension funds, government entities, retail investors and any businesses with US assets. It’s an ugly tax grab at minimum, and a nail in the bond market coffin is it not?

What it also is, is budgetary wolf bait. The wolves are smelling blood, and they will fight back. Liz Truss got a lesson, remember back to the Greek Crisis and how that unfolded, remember Bill Gross’s attack?

BM: Well of course it is. Trump is doing what I said he’s doing, he’s acting like a mafia don and he’s making rules and he’s making enemies out of everyone. Now there is no law that says you have to like your neighbor; however, you do have to get along with your neighbor and declaring war on China and Russia and Iran and Canada and Mexico, and now everyone in the world, by increasing taxes, the people in the investing industry want stability. And anything you do to add instability is going to have a negative reaction.

Now because Trump’s only time that he ever wore a military uniform was when he was in high school, okay, he was a draft dodger, he had bunions or had sore feet or daddy bought him off, he’s my age but he doesn’t have a day of military service. What he doesn’t realize is anytime you go into combat with somebody, and you’ve got a very elaborate plan, your enemy is doing exactly the same thing.

I will tell you that China has just turned Trump into a TACO over the magnets, okay, not even the rare earth elements, the magnets made from the rare earth elements and Trump is going to cave.

RM: It’s funny you mentioned the draft dodge, because in the phone call that he had with Putin he told Putin that. “You’re going to have to fight on a little more.”  I’m paraphrasing a little bit, but he said, “You guys are going to have to fight on a little more, you’re going to have to lose some more people, you’re going to have to get messier.”

And then in an interview he repeated what he had said, but then what totally blew me away, Trump said “Sometimes you’ve got to let the kids in the schoolyard fight, and they rough each other up a little bit and then they get to be friends they can make peace.” I do not see a comparison.

BM: Let me point something out. Were you aware that the secretary of defence was observing the attack on the four airfields by the drones over the weekend? He was observing it in real time.

RM: Yes, it appears the head of NATO was likely watching it as well.

BM: Okay, so the secretary of defence of the United States was watching an attack on the Soviet strategic fleet. Did the President of the United States know about the attack?

RM: If the Secretary of Defence knew the President had to know.

BM: That’s exactly it, it’s not maybe, he had to know. Here’s what everybody’s missing: the attack on the third arm of the triad of the nuclear weapons of Russia enables Russia as part of their nuclear policy that if there is an attack on their nuclear fleet, they have the right to respond with nuclear weapons.

Now Donald Trump’s trying to claim innocence, but he couldn’t possibly be innocent. It would be impossible to believe that he didn’t know. If the President of the United States knew that there was going to be an attack on those four airfields and he didn’t tell the Russians, that is a declaration of war by the United States on Russia and Putin knows it.

RM: Yes, your right, bombing those Tupolev Bear bombers was an incredibly stupid political stunt.

It is part of Russia’s Nuclear Doctrine that if you attack a nuclear facility, if you attack part of their nuclear fleet, they do have, according to them, the right to use nuclear weapons in response. And everybody knows this, including the Ukrainians, the US and NATO.

BM: Let me read something to you, this was on halturnerradioshow.com: “Ukraine may be soon left to wither on the vine. President Donald Trump is reported to be outraged by Ukraine strikes last weekend on one leg of Russia’s nuclear triad – their strategic bombers. The White House confirms it is considering ending support for Kiev.

The attack caused anger in the White House which was apparently kept out of the loop by Ukraine.” And we just talked about it, there is no way the secretary of defence was watching it in real time and Trump didn’t know about it so we’re doing things that are exceptionally dangerous, and Trump I think the guy’s lost it.

RM: The world’s arming and I think we’re quite a bit closer to nuclear war than we were a short time ago.

So, let’s go check the Doomsday Clock, it’s always fun to look at. The furthest time from midnight ever was 17 minutes so the clock was 17 minutes from midnight which is Doomsday, that was in 1991. And the closest it ever came, now this is going to rock you, the closest the clock ever came to Doomsday, which is midnight, was 89 seconds in January of this year, 2025. One minute 29 seconds away from Doomsday; that was four months ago.

BM: It’s been cut in half in the last week.

RM: Yes absolutely. You can do an awful lot in 44.5 seconds Bob.

BM: That’s right.

RM: I’m going to read some headlines: ‘China’s grip on rare earths gives China leverage in U.S. trade deal’; ‘Carmakers warn China’s rare earth curbs could hurt halt production’; ‘Global alarms rise as China’s critical mineral export ban takes hold’. Well, well, let’s remember – if you aren’t making cars, you aren’t making tanks either, who the hell were those two old guys warning this was going to happen two months ago?

It was our first talk, we talked about what was going to happen, and they’re not even yet talking about the US going to war, they are yapping on about making cars. In a conventional war they’d run out of rare earths and graphite, and every other critical metal China supplies 50 to 100% of to the US. In three weeks!

Chinas got the US by the short hairs in these trade fights.

BM: Nope, China’s got the world by the short and curlies.

RM: There you go, yes.

BM: We live in interesting times.

RM: Yeah, maybe too much interesting going on. I’d like to go for a week where we could talk about some pleasant things.

BM: I keep thinking we’re going to run out of things to talk about, and I’m seeing things that stagger me. Do you realize what Ukraine has done in the last week?

RM: Sum it up for us please.

BM: Okay, they have the long-range drone attacks on four airfields and the extent that from a tactical POV it was successful because they proved it could be done. It wasn’t terribly effective, Ukraine claimed blowing up 40 planes and it looks like more like 10.

There was a seaborne drone attack on the Kerch Bridge. They blew up two bridges, one on a freight train, one on a civilian train where they blew the bridge just as the train was coming underneath and caused dozens or hundreds of casualties.

There were multiple drone attacks against Russia in Crimea, larger than they have done before, and they sent hundreds of drones to try to assassinate Putin when he visited the front in Kursk. That’s in the last week.

RM: It doesn’t really seem that Ukraine’s interested in any kind of peace. You see the US backing down, I guess they figure the EU is going to step up and save them or somehow, they’re trying to bring NATO into this even more than they already are.

BM: Anyone who’s ever worn a uniform, who’s spent a day in combat could tell you there’s no way in hell that Ukraine was going to defeat Russia, and it’s very funny that the UK and Macron and the Germans think they can declare war on Russia. If Napoleon couldn’t defeat Russia and Hitler couldn’t defeat Russia, do you think Zelensky’s going to? Or Trump or Macron or Starmer, not a chance in hell, those people are coked-up idiots.

RM: I’ll just say what the salient into the Kursk enclave was. They said they ended up losing 90,000 of their best soldiers. From a tactical point of view, it wasn’t a bad move to relieve the pressure on some of the other parts of their front line, but they made the huge mistake of staying way too long.

Go in there, do the attack, maybe hold it for a week, come back to your own lines. Show them this dog can hunt, there’s still lots of fight. But you must come back to your own lines. You can’t be that far extended, so a bad decision cost them an army and it ends up as a very stupid and very expensive mistake.

BM: We know it was the UK that did that.

RM: We’ll follow up on that next time. I want to switch gears here before we finish and go into the US crop report I just read. We’ve talked before about how dire the food situation could become in the US, and the crop report was well I’m not going to call it a disaster, it wasn’t, but it wasn’t great either.

Every year I analyze crop reports from the US and Canada. What I’m looking for is how successful planting season was, which is over now of course. What I want to look at is the percentage of take, when you put seeds in the ground the take is the percentage that germinates, you can see emergence and keeping track of growth is something you want to do.

Some of these crops they’re down to 50% take, some of them are doing well, but not all, you’ve obviously got some problems already starting in the US grain crop.

The next thing you watch as the growing season progresses is the weather. You’ve got your take and then the most important ingredient for a successful crop is avoiding too much heat and dryness. You want rain, you want just the right heat, both the heat and the dryness levels are critically important and the prediction is, “According to forecasts and agricultural reports drought and heat are expected to negatively impact US crops in 2025. Warming temperatures and dry conditions especially in the Missouri River Basin are expected to lead to drought.”

Of course, that’s going to impact crop yields and potentially forcing farmers to reconsider high-use water, high-irrigation crops like corn.

And there’s zero orders from China on the books for US crops, and I think that what we’ve got coming is a perfect storm in the US agriculture industry. You’ve got screwworms, you’ve got bird and swine flu, now you’ve got heat, dryness and already drought, you’ve also got river levels that are getting low, and that’s a concern for irrigation. I think there’s a perfect storm coming and it’s not a good one for the US agricultural industry.

BM: Well, you just raised the screw worm, let’s talk about the beef production in the United States.

RM: Okay.

BM: It’s the lowest it’s been since the 1950s. We have a beef crisis, and prices are going to go through the roof.

RM: It’s much worse than most people think. They’re going to have to start slaughtering cattle because the screw worm is coming in, it came in from Mexico apparently and it is spreading.

It took an immense effort to eradicate this thing decades ago and now it’s back. With the funding cuts to the agencies involved this can quickly turn into a country wide disaster.

And this potential disaster isn’t going to be a short term one. It’s not like you can just wave a magic wand and get back your herds. When you start slaughtering your herds your destroying decades and decades of carefully planned genetics leading to a prized herd of beef producers.

The ranchers around me, they’ve all got 80 to 100 beef cows, they put a bull on every 20 to 25, and they have their babies every year. Every year they keep their best cows and heifers, sell the rest, and they change bulls every couple of years because you can only breed back once.

So, what they’re always doing is they’re improving the quality of their herd. Always it’s about genetics and it’s a fascinating thing to do and watch. I did it, and now I watch my neighbors do it.

This is a generational thing that’s being destroyed and it’s going to last far beyond our lifetimes.

BM: I agree.

RM: Okay, anything you want to cover, did we miss anything you want to bring up?

BM: I don’t think so, I will say in the last two months we’ve gotten things right.

RM: I can’t think of one thing that we got wrong; we haven’t talked about everything but everything we have talked about has been bang on, Bob.

I honestly think that to protect themselves people need to start listening to other sources of information other than mainstream media.

BM: Yes.

RM: Okay, thank you, it was a pleasure talking to you as always and we’ll talk again next week.

BM: Super deal.

Bob Moriarty, 321gold.com

Rick mills, aheadoftheherd.com

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Richard owns shares of Graphite One (TSX.V:GPH). Bob Moriarty owns shares of Silver47 (TSX.V:AGA). AGA and GPH are paid advertisers on Rick’s  site aheadoftheherd.com This article issued on behalf of AGA and GPH.