Thursday morning, Bob Moriarty published a piece titled “The Greatest Depression Just Began. This is no drill” – scary stuff and well worth a read and some serious consideration. In late January Bob warned that the corona virus would be the catalyst to pop the “Everything Bubble”, so far he couldn’t be more correct. I figured it was a good time to have a quick chat with Bob in order to see how he has prepared himself for the greatest depression ever….
Goldfinger: You know, you wrote a piece this morning that was pretty damn scary, and even subscribers in the trading lab… I put the link in my morning email. People read it and they’re telling me, “I think I should sell all my junior mining stocks, because I don’t want to go through 2008 again.” I mean, is that what people should do? Should they just sell everything?
Bob Moriarty: Well, no. And here’s what’s interesting. You should go back and read my January 27th article. I said exactly the same thing. And the really strange thing is that was the time to prepare. People have had a month of incredible prices across the board, and if they’d listened to what I say in my book, I was warning people.
Now, I deliberately downplayed it in January because I didn’t want people panicking, but for crying out loud, I mean, look at what just happened in Italy and France this morning. People may be locked down in Japan. They are saying the kids aren’t going to go back to school until April. This is going to get very ugly. I warned people. But I think it’s way too late to be selling now. I think we’re going to have the opportunity of a lifetime, but it’s going to get ugly.
Goldfinger: Okay, so let’s draw a distinction here, because it’s one thing to be bearish in the S&P 500 or on Netflix or Apple or Tesla, which you correctly called. I mean, Tesla traded under 700 this morning. We were talking about it when it was above 900 a few weeks ago. You said that that was the top. It sure looks like the top. But what if you’re an investor in precious metals? You own gold, you own silver, you own mining stocks. I mean, should they be selling that stuff here? Because you said in your article that cash is the place to be now, so you’re actually favoring the US dollar over gold stocks?
Bob Moriarty: Well, what I’m really favoring is liquidity. If you look at the number of shares traded on Irving, it wasn’t very many shares. What it really means is there are no buyers.
Goldfinger: Okay, so you’re not saying to sell gold miners? And actually, did you buy some Irving Resources (CSE:IRV, OTC:IRVRF) this morning?
Bob Moriarty: No, I didn’t because I think we’re going to go through a 2008, and I do believe there will be a hundred gold stocks selling for less than cash before we have a bottom. I went way out on a limb in January. I said, “Okay, this is it. This is the everything bubble blowing up.” Now, do you remember the world map of the Middle Ages, do you remember what it said on the edge of the map?
Goldfinger: In the Middle Ages? No.
Bob Moriarty: It said, “Beware dragons lie here.” In the Middle Ages, they had no idea what went beyond the edge of the map. We are in uncharted waters here, just like where the dragons were supposed to be on the world map during the middle ages. No one knows what we should do, we have never been here before.
Goldfinger: Okay, so let’s talk a little bit about the details of what you wrote this morning.
So what you’re saying is that this virus is going to spread around the world, so it’s going to be a pandemic. And it’s going to get to Africa, it’s going to get the countries that are poor, that don’t have medical care of quality, they don’t have hospitals like China and the US or Europe does. And basically it’s going to kill millions of people. What evidence, what data do you have to support the idea that millions of people are going to die from this?
Bob Moriarty: Okay. There’s two things that you need to know. One is how deadly it is, and the other is how easy is it to transmit? If you compare it to the Spanish flu of 1918, it is deadlier than the Spanish flu and it’s easier to catch. The Spanish flu resulted in the deaths of somewhere between 40 and 100 million people. Now, there are some things, and I absolutely go out of the way in my books to point this out to people, keep things simple. Would China lock down 50 to 100 million people for a bad case of the flu? And the answer is hell no.
You can look at what happened on the Diamond Princess in Tokyo. Okay? Tokyo is one of the most sophisticated cities in the world. I love the Japanese, they’re wonderful people. So, they get this cruise ship in there, they’re going to quarantine the passengers. It’s totally out of control. 700 people on that cruise ship came down with the virus. This unfortunately is going to show how stupid governments are and how impotent they are, and the people of the world are going to pay a giant price.
Goldfinger: Yeah, did you watch Trump yesterday when he talked about this? It seemed like what he said actually probably caused more alarm than it did put any fears to rest.
Bob Moriarty: Absolutely. I mean, the idea of putting Pence in charge of it, Jesus Christ, that chump couldn’t run a good whore house.
Goldfinger: Yeah, it seems to me like the US might be way behind the curve here on this story, right?
Bob Moriarty: They’re absolutely clueless. When something like what happens to Northern Italy happens in the US, and it will happen, you’re going to have total panic.
Goldfinger: Okay. So the problem though is that betting on a crash or the end of the world has rarely been a good bet. I mean, you agree with that?
Bob Moriarty: Oh, absolutely.
Goldfinger: So on a scale of 1 to 10, how much fear do you think the market is priced in here? I mean, we’re down 10% on the S&P. A lot of mining stocks are down 20% to 30% in the last few days. Do you think the fear is starting to get a little overdone in the short term, or do you think it’s still going to get worse?
Bob Moriarty: It’s overdone in the short term, but we are so far away from a bottom. Here’s the deal, and the question you should be asking, with $255 trillion in debt in the world, is there any way that you can avoid a massive crash? And the answer of course is hell no. Now, people have been predicting it since 2008. I have been telling people to prepare for it since, really, 2004, 2005. I knew it was coming. But it’s here and it’s now. You and I were talking about Tesla and you asked me when I thought it would peak, and I mean, literally almost to the minute, is when it would peak. Human behavior is always the same.
Now, it was obvious to me, in January. based on the actions of the Chinese and the numbers that they were already releasing, this was going to be a very dangerous pandemic and the world’s just simply not prepared for it. We have a just in time manufacturing society. An automobile manufacturer requires 30,000 parts to build a car. All you need is one supplier to shut down and you stop making automobiles. We’re just not geared for this. We’re going to go through the worst crash in history. It’s going to make 2008 look like a child’s birthday party.
Goldfinger: Okay. So, if we go back to your posts and talking about how this is going to kill millions of people, I mean, how long do you think it’ll take to kill millions of people? I mean, won’t that take more than a year? And won’t we come up with some sort of vaccine or way to treat this in the meantime?
Bob Moriarty: There is no way to treat a virus.
Goldfinger: Well, that’s not true. The flu is a virus and we have Tamiflu and other things to help the flu symptoms.
Bob Moriarty: And they have flu shots every year. And the strange thing is more people die from the flu shot than die from the flu. Viruses are basically incurable, okay? They’re not going to come up with some magic bullets. It’s not going to happen. The virus will come and it will go, and strange enough because it’s deadly it won’t last as long as the typical flu. But yeah, it’s going to kill millions of people. Don’t even think of what’s going to happen when it hits Africa. And I guaran-goddam-tee it’s going to hit Africa. You’re going to have half the people killed total in Africa because the medical facilities are so poor.
Goldfinger: But okay, the mortality rate on this is 2% to 3%. So when it’s treated properly, when people are given proper medical care, it’s been mostly older people (over 60) that have been dying from it. There’s only been a few cases of young people that have died from it. So don’t you think that the millions number is a little bit overblown?
Bob Moriarty: How old are you?
Goldfinger: 40.
Bob Moriarty: I’m 73. I need to panic. Strange enough, I saw something today that was very good. A guy made a very convincing argument that this is a weaponized bio weapon by the China and deliberately released by the Chinese. And he didn’t say absolutely that’s true, but from a logic point of view, what are the chances that something like this would be released just before the greatest mass movement in a the world. The chances of that happening are near zero. It is by a bio weapon. But there’s two things, and nobody’s picked up on this. Absolutely correct, people above 60, it could be extremely deadly, but children don’t get it. Okay? The number of children killed is like a handful. So it’s an interesting virus. I think in hindsight we’ll realize it was a bio weapon, and we’re going to get rid of a lot of the old folks.
Goldfinger: So maybe it’s put together by the Chinese government so they could trim their population a little bit (laughs)?
Bob Moriarty: Don’t laugh. Absolutely. There are a lot of indications it’s a bio weapon. Somebody just sent me an email that said, “Oh no, the US government did it.”
The US government is too incompetent to do something like this and the Chinese are more than willing and quite capable. You rid yourself of the old and useless and you blow up the financial system at the same time so you can write off your debt. What a glorious idea.
Goldfinger: All right, let’s talk politics for a second. So couple weeks ago it seemed like Trump reached a new peak for his presidency in terms of popularity, and the odds of winning a second term went above 50% because the Democrats looks so incompetent. Now, Biden’s done. He’s done. Yang is done. It looks like it’s coming down to Sanders and Warren, and maybe this Pete guy, but I don’t think he really has a chance. So the Democrats have a very weak field of candidates. I don’t think any of them could beat Trump unless Trump kills himself in the meantime. I wonder if this virus, if it does play out anywhere near what you think is possible, I wonder if his incompetent handling of it will actually sink him. You know? What are your thoughts on that?
Bob Moriarty: I don’t think so. The Democrats look like the biggest bunch of blithering idiots in the world. We’ve talked about this before. I am not a Donald Trump fan and I don’t wear a MAGA hat. I think the guy is a total twit. I wish he would fire his hairdresser and change the color of his hair. I just can’t cope with that clown hair. But the problem is at the end of empires, that’s when you get the fools.
Goldfinger: So, you don’t think even if thousands of people start to die from this virus in the US and the stock market is performing poorly, down double-digit percentages year to date, you don’t think that’s enough to upset Trump and vote in a Democrat?
Bob Moriarty: No, no. I think the problem is, with the Democrats, there isn’t a Democrat candidate who could get elected dog catcher.
Goldfinger: Yeah. I mean, that’s the problem. But I mean, Sanders can promise people all sorts of freebies, right? He can buy a lot of votes by promising people to forgive their student loans, that we’re going to tax the corporations and take from the rich and give to the poor. You know, if the economy is really hurting, I think Sanders could beat Trump. So I think Trump has to be very careful here that really his Trump card, his ace up the sleeve is the stock market and the economy. If people are doing okay, they’ll probably keep him in office, but if things turn sour, then even though Sanders is full of shit, people will vote for a change. Right?
Bob Moriarty: That’s true. But I think you’re making a flawed assumption.
Goldfinger: And what’s the assumption?
Bob Moriarty: That there will be an election.
Goldfinger: That’s right. You say there’s not going to be an election.
Bob Moriarty: Look at it this way. The Democrats didn’t learn from the Mueller investigation. They didn’t learn from the impeachment. And everybody’s forgotten, there wasn’t a chance in hell that Senate was going to vote to throw that idiot out. To impeach somebody you need 51%, but to toss him out of office you need two-thirds. And they weren’t going to get two-thirds, and they knew they weren’t going to get two-thirds. The Democrats are doing everything in their power to overturn the 2016 election and it ain’t going to happen. They are going to continue their illegal coup d’etat. You’ve got so much corruption in the DOJ and the FBI and the CIA and the DNI. It’s the end of empire. You know? There a better chance that they’ll assassinate Trump, and if they do that, we go into immediate civil war.
Goldfinger: I was just thinking about this. Is it a coincidence that for a brief moment about six weeks ago, we were staring at nuclear war with Iran when Iran fired 35 missiles at a US base in Iraq after Trump had ordered the assassination of Soleimani. So that happens, gold spiked, stock futures dropped. Then everybody calmed down. No US troops were killed and the market made new highs. Then this virus started to take hold and it just so happens that Iran has an outbreak of the virus that they supposedly have no idea where it came from. Is that a coincidence that there was this confrontation with Iran and then suddenly Iran has the virus outbreak?
Bob Moriarty: I think it is, but I don’t have enough information. I don’t think anybody has enough information. What you’re saying is true, but at the same time, the cruise ship in Tokyo had 700 people catch the virus, and Northern Italy had 650 people catch the virus in a couple of days. So, it’s an interesting thought, but it’s one of those things I’d give maybe a 10% probability of being true.
Goldfinger: So if there’s a correlation, then maybe this virus was actually a weapon that was deployed by state actors, right?
Bob Moriarty: The scary thing is, if you think about it, how difficult would it be to get 10 or 15 people contaminated and then send them to conventions, send them to airports, send them on the New York subway? There are scary implications of this. If people had maligned intentions, they could do some pretty evil stuff.
Goldfinger: Right, right. So, where does that leave us? And so, tell me what you’re doing. You said you’re 73. You basically just wrote the post that said millions of people are going to die from this and this is going to be the worst economic downturn in your lifetime. So what are you doing to get ready for it?
Bob Moriarty: I’ve been ready for two weeks.
Goldfinger: So what does that mean?
Bob Moriarty: I got enough food, fuel, water, entertainment to be off the grid for three to six months. If you’re over 70 and you’re male and you catch the virus, the probability of dying probably goes up to 15% or 20%. The smartest thing people can do is stay off the grid, and I was warning my closest family a month ago, “Get prepared and be prepared.” You see what happened in Italy literally over the weekend, the shelves were bare over the weekend. I didn’t write my piece to make people panic, but I did write my piece to understand the time is going to come very soon where you will not be able to get food, you will not be able to get water, you will not be able to get fuel. And get off your ass and do something now.
Goldfinger: Okay. Well, on that note, let’s say you do have some dry powder here, you do have some cash that you can put out there and risk. What would you buy here? Or would you buy anything?
Bob Moriarty: I wouldn’t buy in here. We are going to see another 2008 or worse, and I’m looking for it. If you remember what it was like at the end of 2015, early 2016, there were dozens of stocks selling for the cash they had on hand. I’m a contrarian and I want to see everybody get negative. When everybody gets negative, then I get positive.
Goldfinger: All right. I think we’ll leave it on that note. Short, sweet, to the point. Thanks for your time and insights Bob.
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