Bob Moriarty, Founder & Editor of 321gold, has had a hot hand recently with some of his market timing posts. In early February he emphasized that the bottom is in for gold and gold mining shares, gold surged more than $100/oz and gold stocks surged more than 30% within two weeks. Then last week he called for a correction in gold after the parabolic surge we had just experienced, once again he was spot on as gold pulled back $70/oz over the next couple of days. For someone who definitely does not proclaim to be a market timer, Bob is pretty good at timing a tricky market.
Mr. Moriarty is also a Vietnam War veteran and an astute observer and commentator on geopolitics and war. With the Syria situation quickly heating up we decided it was time to connect and tap into his latest thoughts and insights into what has turned into a rapidly unfolding and potentially quite ominous situation in the Middle East.
Turkish tanks staging on the border with Syria
CEO Technician: We wanted to get your take on the fast moving events in Syria. It seems that Turkey and Saudi Arabia would like to put troops on the ground in Syria in order to halt Assad’s recent advance and counter the growing Russian presence. This situation seems like the most explosive powder keg the world has witnessed in quite some time. What’s going on and what’s next Bob?
Bob Moriarty: Here’s what you need to understand, if you go back historically you should ask yourself the question “why is there a war going on in Syria?”. In the western media we are told it’s a civil war and that’s absolutely not true. And you know it’s not a civil war because you can’t go down to Wal-Mart and buy a tank. What you have is a variety of countries, and this involves the United States, Israel, Turkey, Saudi Arabia, France, and Great Britain. Each of whom has their own agenda trying to overthrow the government of Al-Assad. Now Al-Assad is a thug but he’s in a neighborhood of countries run by thugs. So Al-Assad is no better or no worse than anybody else in the region.
When Russia stepped up to the plate in September and started sending aircraft to bomb ISIS it changed the entire picture. What we have now is the U.S. pursuing one game, Great Britain pursuing another game, France pursuing a different game, Saudi Arabia pursuing a different game, Turkey pursuing a different game, Russia pursuing their game etc. The danger is that you’ve got some pretty powerful forces in play here and anybody who would take Russia on directly is insane. Russia is the 2nd most powerful military in the world and they’re incredibly aggressive on a counter-offensive.
The President of Turkey, Erdogan, has been financing ISIS. ISIS was created by the United States and Israel by their actions in Iraq and Syria, so while the U.S. and Britain, France, and Canada gave lip service to fighting ISIS, it was in fact their actions that created ISIS in the first place. The situation as of today is that Turkey has massed a considerable ground force on the border with Syria and they are poised to advance into Syria. Saudi Arabia has said that they will support Turkey with aircraft while they advance. Saudi Arabia also has a major military training going on with 350,000 troops so they would be poised to invade either Syria or Iraq from the south while Turkey invades from the north.
Russia has a treaty with Syria, they have a naval base at Tartus, Syria and they intend to defend the government of Al-Assad. So far Russia has been very effective at bombing the so called rebels, and they have them on the run. Erdogan’s son has been buying oil from ISIS and Turkey has been supplying munitions to ISIS. Turkey actually went a step too far in November when they shot down the Russian aircraft. That was an ambush and a very foolish move. So we’ve got a situation now in which Turkey and Saudi Arabia are threatening to invade Syria and if they do it could easily go nuclear and it could easily start WW3.
CEO Technician: It’s become clear recently that Saudi Arabia and Turkey are allies with ISIS and this has become blatantly evident in recent weeks as the Russian bombing and Syria government advance has gained momentum. Saudi Arabia and Turkey are squirming as they see ISIS and rebel groups on the verge of a massive defeat. And perhaps what’s most interesting is that both Saudi and Turkey are allies of the U.S. so in a not too indirect way the U.S. is supporting ISIS. How does the 2016 U.S. Presidential election play into this Syrian/Middle East quagmire?
Bob Moriarty: You used an absolutely brilliant term, this is a quagmire. We should understand first of all that the United States doesn’t have a dog in the fight. What exactly did Assad do that we are trying to overthrow the legal government of another sovereign nation? We did that in Libya (use military force to overthrow Gadafhi) and what exactly did that do for the Libyan people? It took the richest country in North Africa, it impoverished it, it killed tens of thousands of people and created millions of refugees.
The problem with Syria is that there aren’t just two different sides. There are about ten different sides and there are no good guys. What’s crazy is that the western media for the most part is ignoring Syria even though it’s extremely crucial and extremely dangerous. I would hope that somebody will sober up and realize that we need to have a peace conference and sort this out.
CEO Technician: There is an effort to make a peace agreement, however, in the meantime Russia is bombing all of Assad’s opponents into oblivion….
Bob Moriarty: Well that’s a good thing. Here’s the deal, Assad’s government is the legitimate government of Syria and if they have terrorists in their country they have every right to eliminate those terrorists by military action. Syria isn’t doing anything illegal and they’re not doing anything against its own interests. Syria (Assad and Russia) is attacking terrorists who are supported by outside interests. Now let me point something out, the U.S. is not inside Syria at the invitation of the Syrian government, neither is Turkey, neither is Saudi Arabia. Any decision to invade Syria is a violation of the Nuremberg Tribunal where it was determined that the biggest crime a country could commit was a war of aggression. This is a war of aggression on the part of Turkey, Saudi Arabia, the U.S., Great Britain, France, and Israel.
CEO Technician: So what happens next in Syria? How does the chess game unfold over the coming weeks/months?
Bob Moriarty: Well I’m a guy who spent two years in war (Vietnam) so I have a pretty good idea how it’s going to play out. If Turkey and/or Saudi Arabia try to invade Syria they’re going to get their butts kicked. Russia is not going to allow their interests in Syria to be compromised. The western media is trying to do everything they can to demonize Putin but Putin is the only guy looking out for his own interests and I actually totally agree with him. Russia has strategic interests in Syria, the U.S. does not.
The really funny thing is that we have the son of the President of Turkey supplying weapons and cash to the biggest criminals on the planet (ISIS) and we don’t hear anything about that in the U.S. press. The U.S. could have stopped ISIS a year ago and they didn’t, now Russia is doing the job and they are doing it very well but Turkey and Saudi Arabia don’t want to see ISIS destroyed.
CEO Technician: I find it hard to believe that the U.S. will sit idly by if Russia begins bombing Turkish/Saudi troops and tanks in the event that an invasion occurs.
Bob Moriarty: Everybody is underestimating Putin and the Russians. I have stated unequivocally that Russia will not lose in Syria. I don’t give a shit what Turkey does, what Saudi Arabia does, what NATO does. They’re going to get their butts kicked if they step deeper into Syria. It’s a war that we should not be fighting, we should step out and let the Syrians determine their own fate.
Scott Armstrong: We’ve recently seen about a $70 pullback (~5%) in gold after a sizable rally (20%) to begin the year. You’ve been very accurate with some of your timing recently including the recent correction. What’s next for gold and have we put in a bottom in the miners finally?
Bob Moriarty: The bottom in gold & silver was back in November & December and we’ve had a significant move since then and about February 1st and 2nd precious metals ignited and took off. We’ve seen the HUI (Gold Bugs Index) up more than 57% in 3 weeks, i’ve never seen anything like that in my life. The healthiest thing that any market can do is to advance strongly, have a good correction, and then resume the advance. So on the 12th of February I said it was time for a correction in gold, and in fact the 11th was the high in gold ($1263.90). We’re into the correction and I don’t think the correction is a bad thing, I look at it as a good thing. I think the correction will be over by the 1st of March and regardless of what happens in Syria gold & silver have seen their bottom and they’re both going to go a lot higher. The US dollar has almost certainly seen its top and it’s going to go a lot lower.
CEO Technician: I know you talk to a lot of management teams and you have your finger on the pulse of the precious metals and resource space. What’s your feeling of the overall mood? Where are we at in the cycle?
Bob Moriarty: The management teams of most of these companies have either hunkered down or begun to see this as the opportunity that it is. It’s an incredible opportunity, particularly in the mid-tier stocks. Companies that are producing gold in the hundreds of thousands of ounces per year, not the majors such as Barrick or Goldcorp. There’s some extraordinary bargains in the mid-tier producers, one that I bought a couple of weeks ago is SilverCorp. (SVM-T) they’re in production and they’re making money even with silver at $14. The stock went from about .60 to $1.09 in about two weeks and there’s going to be a lot more of that. The acquisition of Lake Shore Gold (LSG.TO) is another example of value being unlocked in the mid-tier space.
Scott Armstrong: Are there any other names that stand out to you right now that you would like to share with our readers?
Bob Moriarty: Another name that I am especially proud to be associated with is Gold Standard Ventures (GSV.V). The management of GSV has done an excellent job, they have raised $33 million and they have moved the project forward despite the market challenges. It will be a mine.
We are in the opportunity phase of the market. You can make a lot of money when everyone is terrified of prices falling farther. Platinum is also very cheap right now, it’s trading at about a $270 discount to the price of gold and that’s absurd. It costs more money to mine platinum and platinum is a necessary metal that has a wide array of industrial uses.
Minco Silver (MSV.TO) is another very cheap stock that I have written about. MSV is trading around .45 and they have $1/share in cash.
Scott Armstrong: If you were handed a chunk of cash right now where would you invest it?
Bob Moriarty: I would put it in platinum, silver, shares of GSV, shares of Red Eagle (RD.V), and quality mid-tier producers.
CEO Technician: Any parting thoughts? Words of wisdom for our readers?
Bob Moriarty: I suggest that everyone follow the Syrian situation closely and as I wrote yesterday I expect Turkey to conduct a false-flag operation in order to justify an invasion of Syria.
We would like to thank Mr. Moriarty for his time and we hope that cooler heads will prevail and the Syria situation will not boil over into a much larger conflict.