Bonds and War, Canada Sliding with Carney Bird, FTZ
Fitzroy Pops
Dear reader, a short market update today as we are focusing on finding some new picks with silver breaking out, the turn around with Uranium and the precarious state of the economy with the over valued bubble like stock markets.
Bonds and War
I am not going to get in all the rhetoric of Musk and Trump, suffice to say. Last Tuesday, Musk posted to X, "I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination." His post was immediately met with support from Sen. Rand Paul (R-KY), who said "We can and must do better."
Really, it is about what I have been commenting on for the last few years, just someone a lot more known than me saying it. Governments are addicted to over spending and are keeping the inflation and interest rates up with their crazy deficits. The bond markets are not going to accept it anymore.
The normal 60/40 equity/bond portfolio is not working very well anymore. Some analysts and I agree, are suggesting replacing some of that bond component with gold.
Since 2000, bonds were often an effective hedge against equity-led losses. However, this dynamic dramatically changed in 2022. Both bonds and stocks suffered negative returns, with the 60/40 portfolio declining 17.5%, its worst performance since 1937, and its fourth worst in the last 200 years.
The recent decline in 2025 had similar characteristics as bonds again were not a good hedge. They did work for about a week in the April market decline, but soon turned into a loss after that. Equity markets have not recovered to their February highs yet. I do expect we could see a double top, but equity markets remain very risky.
Michael Pento, founder of Pento Portfolio Strategies was in a recent youtube interview. U.S. households now hold a record 70% of assets in equities - “the highest it’s been ever,” according to Pento. He predicts that when the next recession triggers a 30% market drop, many retirees will panic-sell, potentially driving the market down 50%.
As I have commented before, retail investors are notorious to buy at the top.
World War 3
The risk of this took quite a jump recently. No doubt you heard about Ukraine's great achievement of attacking Russia air fields and destroying or damaging perhaps up to 1/3 of Russia bombers. Many analysts are calling this Russia's 'Pearl Harbor'.
This is a huge escalation in the war and has all the foot prints of a NATO plan. These Russian bombers have not been used in the war and not intended to be. They are long range bombers and a lot of them nuclear bombers. Attacking and destroying these has no practical strategy in this war.
However, they would be a threat if this war escalates into WW3 and NATO becomes directly involved. Europe is a basket case economically and their far left policies are causing all kinds of problems with excessive migration and green power failures to name a couple. It would take an extensive article to get into all the European problems.
Many European countries are in recession or have GDP near zero, with France, Italy and Germany among the weakest. Statista shows the Euro average at 0.83% GDP in 2024.
The European Commission that is always optimistic is projecting 0.9% growth in the Euro area for 2025, this is a considerable down grade from their fall 2024 forecast.
The other big supporter of Ukraine over seas is the U.K. Economists estimated that under Reeves' tax-heavy budget, the UK’s GDP might have declined by 0.1% in Q4 2024 after stagnating in Q3. The final number etched out a 0.1% gain to avoid a technical recession. Q1 2025 is estimated at 0.7%.
The greatest risk to the European Union and the U.K. Is the growing discontent among the populace. War is a favorite distractions that politicians can use. Many European dreamers think that the Ukraine war can weaken Russia enough where Europe could then defeat Russia and take all their resources. I think that is foolish but this thinking among the elites is very dangerous.
It remains to be seen how Russia retaliates for the airfield attacks, but this war is escalating. It has become obvious that Zelensky doesn't want peace even though Ukraine is losing badly. Peace would cut off his gravy train of $$ and there would be no excuse not to hold an election where he would get the boot. Russia is not going to change their demands. To me, it is easy to see that Russia is going to take Ukraine or Europe/NATO will have to step in, hence WW3.
Things could kind of go back and forth the same this year, but going into 2026 the risk of WW3 is very high if it does not happen before.
I follow Armstrong Economics and he recently revealed that his computer model is predicting the disappearance of Ukraine. The first time the computer has made such a prediction. I think this is quite possible and probably only a matter of how Ukraine gets divided up and who gets what resources of which they have, or should I say had plenty.
Canada Keeps Sliding
Some economists say Canada’s labour market is weakening but not collapsing as job growth has stalled .Canada’s jobless rate rose one-10th of a percentage point to 7 per cent in May amid a gain of a mere 8,800 jobs in the month, Statscan said Friday.
More Liberal legislation – more control
On Friday, the Liberal government introduced legislation aiming to bring down trade barriers within Canada and expedite the process for identifying and approving nation-building projects.
The legislation stipulates that when a federal trade barrier exists, a good or service that complies with “comparable provincial or territorial rules” will be deemed to satisfy the federal trade requirements in Canada. Not sure how this will actually work, but time will tell and sounds promising.
“It will allow Canadian workers to do their jobs wherever they want in this great country,” Carney said. However, if the economy does not get moving, this will probably do little with no jobs to move to.
The second part of the bill is designed to support the development of major projects that align with national interests.
The bill aims to allow the assessment of projects based on their potential to strengthen Canada’s autonomy and security, deliver economic benefits, advance the interests of indigenous peoples, and support clean growth while assisting the nation in achieving its climate change goals.
The process, which involves a single assessment for projects and improved coordination of permitting alongside the provinces and territories. The review process aims to reduce approval times from five years to two.
To me this sounds like another government agency to exert more control and try to speed up previous government agencies with more government over seeing them.
Who decides 'national interests'? Again more control.
It also sounds like projects will have to fit the government's climate change agenda.
I don't think this will bring any investment back to Canada. Reducing approval time is good but only if if if. The government says they will come up with a list of type of projects. Best case, we will see in 2 or 3 years what gets approved and if any building starts.
I am not optimistic, it sounds like more of the same Liberal agenda that got the country in the current mess.
Sorry to be negative, but so far we have heard a lot of good talk with any potential action years away. Now maybe that will change and I will be among the first to let you know. Canada has among the highest tax rates in the world (corporate and personal) and not until these are reduced, will investment come into the country. I have heard no talk of any business investment in any proposed projects. Who will pay for all these so called fast track projects?
In the weekend National Post – Pipeline plans evaporating
The Post's Tristin Hopper writes that previously a vocal opponent, Mr. Phillip (chief of BC Indian chiefs) suggested that pipelines might not be such a bad idea. He suggested that if necessary infrastructure was not built, President Donald Trump would step in. The backlash was swift, leading Mr. Philip to reverse his stance within 24 hours. This brief moment as a pipeline supporter foreshadowed future events. Despite a brief possibility of Canada building oil pipelines, Canadian leaders quickly reverted to their anti-oil stances. As recently as April, a poll commissioned by Bloomberg News found 77 per cent of Canadians not only supportive of a new pipeline, but of one that would be "government-funded." It is a different story, however, at the political level, where specific proposals to actually build and approve a new pipeline are already being met with hedging or new conditions. In mid-May, Prime Minister Mark Carney stated he would support "just doing one pipe," but only if there was a "consensus."
Can we invent a pipeline that contains green energy? Maybe we can funnel the wind or use mirrors to direct sunlight?
Nothing is going to change, this Carney bird is stuck with his Net Zero feathers.
One thing changing is copper prices that broke over $5 last week And Fitzroy popped
Fitzroy Minerals - - - TSXV:FTZ, OTC:FTZFF - - - - Recent Price - $0.45
On Friday. Fitzroy announced that diamond drill hole BRT-DDH022, in the Southwest Area at the Buen Retiro Copper Project, returned 110 m @ 1.94% Cu in oxide mineralization starting at 62 metres. Results from the ongoing drilling program support the large-scale and high-grade nature of the mineralizing system at Buen Retiro. The Project covers 13,240 ha and is located 57 km southwest of Copiapó, Chile.
Highlights:
Hole BRT-DDH022 intersected 110 m @ 1.94% Cu and 416 ppm Co from 62 m, including 58 m @ 3.06% Cu and 502 ppm Co from 97 metres.
Target minerals in BRT-DDH022 are predominantly leachable green copper oxides, tenorite, cuprite, and chalcocite.
Drilling to date has intersected mineralization on several distinct trends within a 1 km-wide x 4 km-long corridor, highlighting the scale of the mineralizing system at Buen Retiro.
Merlin Marr-Johnson, President and CEO of Fitzroy Minerals commented, "I am excited by the wide and high-grade intersection seen in BRT-DDH022 as it highlights the intensity of the copper mineralizing events at Buen Retiro. Combined with historical holes BRT-DDH006, BRT-DDH008 and BRT-DDH012, an emerging trend in the Southwest Area has a strike length of several hundred metres, returning good width intersections grading over 1% copper in oxides and leachable minerals, from surface. In addition, the presence of very high-grade, near-massive, cuprite and chalcocite feeder structures enhances the depth potential of copper mineralization at Buen Retiro.
Nine holes have been completed in Phase 2 drilling at Buen Retiro, totalling 2,105 m to date and averaging hole lengths of about 234 metres. A second rig has been mobilized to site and holes BRT-DDH024 and BRT-DDH025 are currently being drilled. Assay labs in Chile are extremely busy, with Fitzroy Minerals experiencing turnaround times of approximately six weeks. Full assay results have been returned for holes BRT-DDH015 to BRT-DDH020, and some assays are awaited from holes BRT-DDH021 and BRT-DDH022. No assays have been returned for drill hole BRT-DDH023.
Here is the drill map, DH022 is on the left, about 1/3 up from bottom.
The stock has broken out to new highs and we are up about 200% now. Often I suggest part profits here, but there is a lot more drill news to come from this project and Caballos that had high grade in the first hole. If you don't own this, any pull back after this news is a opportunity.
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