Bob Moriarty: The Federal Reserve Has Guaranteed The US Dollar Will Decline
2020 continues to keep us entertained with unforeseen twists and turns occurring virtually every single day. In our last conversation before the November 3rd election in the US, 321gold founder Bob Moriarty and I discussed a wide range of topics including COVID-19, the US election, precious metals, and a junior miner that released extraordinary drill results this week. Without further ado, Energy & Gold’s October 2020 conversation with Bob Moriarty….
Goldfinger: Well Bob, we have no shortage of subjects to discuss today (laughs).
Bob Moriarty: Here’s what’s funny. And I’m going to take credit for some of this. You remember me saying in the next two months, you would see some wild shit?
Goldfinger: Yeah, I do. And you also said we’re not going to have an election.
Bob Moriarty: Well, here’s what’s crazy. We’re three weeks or so away. And you know, it keeps getting crazier and crazier and crazier. And some of the things that have been released literally in the last day or two are so staggering that it defies imagination.
Goldfinger: So, what would be an example of something that’s so staggering that it defies imagination?
Bob Moriarty: Okay. Let me give you an analogy to make it a little bit easier to understand. Imagine you’re in the kitchen, cooking breakfast, and you drop an egg on the floor and it breaks. What do you do?
Goldfinger: Clean it up.
Bob Moriarty: The key is, when you break an egg, you can’t unscramble it. Okay. It’s permanent. You can’t go back whole again. Now, let’s talk about Mueller, who was the head of the FBI, who was in charge of the fake investigation into the Russian interference that the FBI and CIA and Obama and Clinton knew all along was fake. The Department of Justice issued 92 phones to its staff and under the government rules for maintaining records, those phones had to be turned back in with the records on. Of the 92 phones, 80 of them had no significant information. Only 12 of them were legal and 30 of the phones had been totally wiped. Now then, could the head of that committee, who was the former head of the FBI, could they have done that to the phones without his approval?
Goldfinger: I’m guessing probably not.
Bob Moriarty: Well, I would say if 80 phones out of 92 phones, they violated the law. I would say probably not, as well. Clinton, Hillary Clinton, was tearing Trump a new asshole. What arrogance. And they made their arrogance clear when I listened to Comey, his testimony lately. “Oh, I was just head of the FBI. I mean, I didn’t know anything about those FISA Warrants. I just signed them. It wasn’t like it was my job to oversee it. I had people working for me. It was their job to make sure it was right.” And I’m going, “What? Did this guy really just say that?” So, we’ve got Hillary Clinton, who is the instigator of the whole thing in the first place. So, she could get away with her violations of the record laws. Obama knew all about it. Brennan knew all about it. The CIA knew all about it. Holy shit. Now, let me prove to you just how stupid and corrupt the entire United States government, at every level, has become. You know what Newsom, governor of California, just came out with and said today?
Goldfinger: Something about not allowing people to go to theme parks?
Bob Moriarty: Nope. It was better. It was a lot better. He put out at Twitter and he said, “If you’re going out with your family to a restaurant, make sure you put your mask on in between bites.”
Goldfinger: Oh, right, I saw that. All these covid headlines run together at this point.
Bob Moriarty: But when you look at Hillary Clinton and her arrogance and James Comey and his arrogance, and Brannan and his arrogance, and Peter Strzok and his arrogance, we have broken the egg. The CIA has been totally corrupted. The FBI has been totally corrupted. The governor of California is a blithering idiot. You can’t go back home again. I mean, nothing is going to get better from that. And you can have all the theories in the world on how to put that egg back together, but it ain’t going to happen.
Goldfinger: Exactly. So, I don’t want to get into the whole election thing, because it’s simply a never ending topic and everyone seems to have very strong opinions. However, I do want to point out that the country is very emotional, very passionate about this election. People on all sides of the spectrum have very strong opinions, and it’s kind of hard to stomach even going on social media or reading the news right now because it’s just constant. We have all these election ads here in Florida going nonstop. And they must think that the average American voter is very, very dumb, because the ads are so blatantly biased and dumbed down that it’s absurd to believe that anything that’s being shown to us is anywhere near the truth or being objective. It’s impossible. You like to use the saying “gag me with a spoon”. I feel like I want to gag myself with a spoon multiple times a day in the last couple of weeks. Is there anything to look forward to, once we get past this election? Is there any glass half full sort of interpretation to be had here? Can the country get over the election and move forward with some semblance of unity?
Bob Moriarty: Yeah. We can look out and we could say, “Thank God I’m going to die someday. And I don’t have to put up with any more of this shit.”
Goldfinger: Well that doesn’t sound very optimistic. The whole COVID thing has really evolved, it’s been an interesting year, for sure. In January and February, it was very scary. I don’t care who you were. It was very scary because we didn’t really know what was coming.
And then, obviously, the markets had a seizure in March. And then, basically since March, it’s been a year of becoming increasingly comfortable with COVID because we know what it is. We’ve learned more about what it is, we know the fatality rate is much lower than what was initially feared, and we’ve developed better treatments. Obviously we’ve seen what markets have done with the support of the Fed and Treasury etc. Is COVID over from a market perspective? We’ve faced the worst fears and now we are emerging from the abyss, the future could be much brighter in a post-COVID world.
And to put a bowtie on it, I think the fact that the President of the United States contracted the virus and miraculously recovered in a few days tells us that we are way beyond peak-COVID. Why are we still talking about a virus that has a .1% fatality rate?
Bob Moriarty: Because the media is playing it up and trying to keep everyone in fear. With experimental tests that have no particular validity at all. We know how to cure it. We know what the problems are. We know who’s at risk. We know the lock downs are killing more people because of suicide than because of COVID. The government has screwed the pooch from the very beginning. We have total failure of government at every level. When you start talking about the stock market now, there is zero connection between the stock market and reality. It is absolutely Never Never Land. If you want to understand it, go take a quart or two of LSD and smoke it. That’s the only way you can understand what’s going on today. We’re in Never Never Land. It’s going to continue to get worse.
The insurrection, the coup d’etat on the part of the State Department, on the part of the Department of Justice, on the part of the FBI, on the part of the CIA is going to continue until eventually the military says, “Okay, it’s getting way too stupid. We’re going to take charge.” There will be a military takeover in the United States. Now whether it’s before the banks close or after the banks close, or before the hyperinflation, or after the hyperinflation, I don’t know. There is nothing good on the horizon, because we have nothing but a herd of clowns and idiots running this country.
Goldfinger: Okay, so you said a few times that we’re not going to have an election this year. Are you still standing by that?
Bob Moriarty: What I meant to say is we might have an election. Okay, I’ll give credit there. There’s so much stupidity going on now, that I just don’t know how it could get worse. I just know it will get worse. Both the Democrats and Trump are setting up for a conflicted election, if it does take place. At the end of the day, we’re going to say, “Jesus, we would have been far better off if the military had taken over in October.”
We’re so crazy now that I don’t think that any rational person could actually predict what’s going to happen in the next three or four months. I don’t think it’s possible. I think even the suggestion that you think you know what’s going to happen, I don’t think it’s possible. That certainly includes me.
Goldfinger: I posted a chart yesterday, showing Trump’s odds to win in 2016. According to the various polls and bookmakers, Trump’s odds of winning are following a similar pattern to 2016. In the days before the 2016 election Trump’s odds of winning dropped to about 20%. We’re seeing a similar pattern this year, where Trump had a little bit of a lift in early August, and then he’s been tumbling ever since. Depending on where you look, Biden is roughly a two to one favorite. Trump’s odds to win, according to most places, are about one in three, which is very similar to where they were four years ago. If it follows the same pattern his odds to win are going to drop even more over the next few weeks, but then in 2016 obviously, he pulled out the big upset on election day. Is there any chance of something like that happening again this year?
Bob Moriarty: Absolutely. I don’t think the people doing the polls are doing a real poll. I think those are rigged. They’re trying to rig it for Biden. Let’s talk like adults for just a minute.
Joe Biden is senile and he’s a criminal. Why on earth would he be the best pick the Democrats could come up with? I don’t even want to get into Kamala Harris. She’s already talking about her administration. Huh? It’s going to be an interesting time.
Goldfinger: Okay, so turning to precious metals, we peaked in early August, both in the metals prices and in the mining stocks. It’s been a sluggish couple months. This morning, we’ve had some companies put out good results, and their stocks are either basically just flat, or even falling. What’s going on out there, and how much more of this boredom, this range-bound process that we’ve been in, how long is this going to last? When can gold investors look forward to another rally?
Bob Moriarty: That’s a really good question. You actually answered the question yourself, and you didn’t know it. Now I’m certain one of the stocks that you’re talking about that released extraordinary results today is Blackrock Gold (TSX-V:BRC, OTC:BKRRF). Blackrock drilled three meters of 2.4 kilo silver in Nevada. The stock went up about 5%, and then it went down, and as of right now it’s unchanged from yesterday. That company committed the ultimate crime. You got any idea what that is?
Goldfinger: Hmm, no I don’t.
Bob Moriarty: They bored their investors.
Goldfinger: Oh, yeah it’s been a pretty long wait for these assays.
Bob Moriarty: Now part of that is because every lab in the world is backed up. They’re not even through July yet. Everything in July, everything in August, everything is September, they’re still screwing around with. Blackrock did two things: One, I’m convinced they sat on the results until they had a whole bunch of them, and two, it took two months for the assay lab to get back with the results. They literally bored their investors.
Now, I put the numbers in. That’s $1,900.00 a ton silver. It’s extraordinary. They did the same thing back in July, but the results weren’t as good, and the stock was up 100% on the day. The stock was $.43 and one day they released the results, and it went up $.44 (more than 100%) when they released the results. Today, they’ve traded 519,000 shares, and the stock’s unchanged, because their investors got bored. You don’t dare bore your investors or they’re not going to come buy your shares. They want action and they want it now.
Goldfinger: Okay, I agree with you, it’s been a long wait for those results, but with Blackrock in particular, wouldn’t you agree that the results speak for themselves? A 500 meter step out is really impressive and they connected on it, even though that hole wasn’t as good as the multi-kilogram intersection, but still if you hit 500 grams per ton silver on a 500 meter step out, that’s pretty damn good. And wouldn’t you say that it’s maybe partially the lab’s fault, but it’s also just the silver market sentiment. When silver was $28 and it had been rising, all the investors have rose colored glasses when they read news from a silver explorer, but when it’s $24 an ounce and it’s been falling, then all of the sudden they have a more dim and skeptical view of good news.
Bob Moriarty: That’s a very valid point. Silver is down 20% from its high, and certainly it’s not nearly as exciting at $24 an ounce as it was at $30. However, the results, as you said speak for themselves. The results are absolutely stunning, absolutely brilliant, but it’s going to take higher silver, or several months to get the excitement back in the stock. It’s a combination of sitting on results. It’s a combination of the price of silver down 20%. It’s a combination of the assay labs being backed up, and basically everybody’s bored.
You and I have talked in the past about DSI. DSI, for both gold and silver, are approaching what I would call a turning point. Gold is 24. I think silver is 29, something like that. They get down to 10, that’s take everything you’ve got and throw it at the market. It’s a correction.
In one of your comments, you said, “Moriarty was early about predicting the correction.” Well gee Robert, aren’t you supposed to be early?
Goldfinger: Yeah, but the problem is if you’re early by a week, and in that week prices go up another 50%, then you miss out on a big move, and everybody’s saying, “Oh God, he was wrong. I sold too soon.”
Bob Moriarty: Hang on, saying a correction is coming is not the same thing as saying, “Sell everything you’ve got.” I run into this on the chat boards all the time. “Oh Moriarty, such an idiot. He said we were going to have a correction, which means you’re supposed to sell everything, and he was 20 minutes early, and I’m pissed off.” I’m going, “My God, I didn’t say sell everything.” I said, “There was a correction.”
At any given time, you need to know what the market’s doing. We’re in a correction. It’s not a big deal. The Federal Reserve has guaranteed the dollar’s going to drop. It’s guaranteed that the stock market’s going to drop. It’s guaranteed the bond market’s going to crash, and it’s guaranteed that gold and silver are going up. Who gives a rat’s ass whether we’re in a correction or not? It isn’t a recommendation to sell. It’s saying this is where you are.
Goldfinger: I think that’s a very important point, and I think a lot of people don’t really understand it. Perhaps people with much smaller accounts, they basically just either go all in or go all out at the same time. In reality, you’re never going to catch the exact bottom, and very rarely are you going to sell at the exact top of anything.
If you’re a long term investor, you have to be clear on the different time frames that you’re looking at and analyzing, and while a market or a stock could have a short or a medium term peak, and then pull back quite a bit, maybe even pull back half of its previous rally, which we see often in the junior mining sector. That doesn’t mean that a long term investor should sell everything because very often, if we sell everything, then we won’t ever get back in. When the dominant trend resumes, and the stock goes up for four months in a row, and moves up 10x, we’re going to miss all of that, just because we were trying to save 10% or something. These shorter term gyrations are noise within the context of the bigger picture and the long term charts. If you look at weekly and monthly charts, all these things that we make such a big deal about on a daily basis, they’re nothing more than tiny little squiggles on the much longer term charts.
Bob Moriarty: That’s absolutely correct. I will continue to say, when I think we’re going to have a correction, I will continue to say, when I think we’re at a top, and I will continue to say when I think we’re at a bottom. None of which anybody can call with absolute precision, including me, even though I get it right a lot more than most people do, but that is not a signal to buy or sell everything anytime.
I would highly suggest people, if you can’t spend $10.00 and two hours, educating yourself on these markets, you have no business in these markets. I’ve got two books that are about $10.00 that you can buy on Amazon, that are excellent for knowing what kind of stocks you should be looking at, what you should be looking at to figure out where you are, and when to sell, which is one of the most important things. If you haven’t read those books, you’ve got no business in these markets. It’s the cheapest and best education I’ve ever seen. There’s hundreds of people that have left reviews saying the same thing.
Goldfinger: I guess there’s two more things I want to touch upon. One of them is one of the things that’s going on right now in Washington is this talk over another stimulus. It’s been going on for weeks, and obviously we had some Trump Tweets on Tuesday telling the Treasury Secretary to end the talks, and the market dropped a lot in the final hour on Tuesday. Then they’re talking again, and it seems like every hour there’s some new twist on it, but basically what it looks like is going to happen is the Treasury is going to issue a bunch more $1,200 checks, and they’re going to bail out the airlines, and maybe there will be something else.
My guess is the total package will be somewhere around a trillion dollars, maybe as much as US$1.5 trillion. Mind you, the U.S. Government is running a record deficit this year, so my question to you is, where’s this money coming from and does it actually really help anything to send out $1,200 checks to people who make less than $100,000 a year, and give another $30 billion to airlines that spent the last decade using all their profits to buy back their stock, so their executives could cash in their options?
Bob Moriarty: That’s an excellent question, and yes there are substantial benefits to the program. If you’re in the ink business, or you’re in the paper business, you are having a booming year.
Goldfinger: If you’re not in the paper business or the ink business, and you’re just an average American, does any of this really matter, and what’s the end game to running record deficits?
Bob Moriarty: I’ll tell you exactly what the end game is, and we would understand it on an individual basis. If they took those hundred dollar bills and put them in an enema bottle, and administered them that way. That money is being printed. It’s like playing Monopoly, where the person who controls the bank is cheating. There is no way you can win. Now if you went to Vegas, and went in one of those private rooms, where they’ve got the high stakes poker, and you sat down and put your chips in front of you. A well dressed guy walked into the room, sat down in the chair next to you, and he pulled out a Sears credit card, what would you do?
Goldfinger: A Sears credit card?
Bob Moriarty: Sears.
Goldfinger: I don’t know, I’d probably laugh.
Bob Moriarty: Would you play?
Bob Moriarty: If a guy is trying to play high stakes poker with a Sears credit card, you cannot win, because if you lose, you lose, and if you win, you lose.
Bob Moriarty: What the government is doing is exactly what the German government was doing in 1922 and it’s going to have exactly the same effect. Now one thing I can say for certain, you can write this down on a piece of paper, you can take it to the bank, and you can cash it. We are going to have hyperinflation. Now notice I didn’t say, we could have hyperinflation. I didn’t say we’re going to maybe have hyperinflation. I didn’t say we’re going to have little hyperinflation. We’re going to have fucking hyperinflation. When we have hyperinflation, and you’re paying $10.00 for an egg, you’re going to realize that maybe that goddamn give away program wasn’t such a great idea.
Goldfinger: Final topic, I know you call yourself a contrarian, and you like to buy low and sell high, and go against the crowd. I have been noticing, and I don’t know if you have as well, but the oil sector is very, very much out of favor. Oil is a natural resource, it comes from the earth. We use it for energy. We use it to drive our cars, but there’s this company called Tesla that has captured everybody’s imagination, and now has a more than US$400 billion dollar market cap. Tesla’s main goal is to get us off of internal combustion engines, and instead to use their electric vehicles.
Now the contrarian in me noticed that if you put the market caps of Chevron and Exxon together right now, they are actually smaller by a considerable amount than the market cap of Tesla. Now Biden is supposed to win the election, and Biden’s doing the green new deal, and Biden doesn’t like big oil, blah, blah, blah, so there’s all these headlines and all this fear about owning oil stocks, and everybody wants to own Tesla.
Performances since July 1, 2020: TSLA (+90%) vs. CVX (-13%) vs. XOM (-18%)
My question to you is, as a contrarian investor, do you have any interest in buying any of these oil stocks that have been beaten up so bad in 2020?
Bob Moriarty: Absolutely. Energy is the biggest business on earth, and I don’t give a rat’s ass what Elon Musk says, green energy is never going to replace it. Oil and natural gas are a very concentrated form of energy. If you actually do the true mathematics on these energy efficient cars, you cannot compete with a diesel powered automobile from an economics point of view.
Governments are rigging subsidies so people think they’re getting better deals, but we’re so far away from those things actually making economic sense. Now you’ve known me long enough, I don’t invest in anything where the only selling point is FOMO. FOMO is a game killer as far as I’m concerned. When everybody wants in it, sorry, deal me out. That’s going to come in gold and silver. We’re a long ways away from there.
Now, I think we’ve got half of 1% of the total world assets in the metals. When it gets up to 8 or 9%, and when people that have never bought gold or silver before are telling you about a great new stock that they just found, call me up. Tell me it’s time to sell because that’s exactly what I’m going to do. Now is the time to buy, and the time to sell will come. When it does come, everybody’s going to say, “Oh my God, you said this thing, they’re going to go down.” Well yeah, they are going to go down. Markets go up, and markets go down. Green new energy is a 3% solution. It’s very popular to talk about, but it’s bullshit.
Goldfinger: Will you tell me when to buy Chevron and Exxon?
Bob Moriarty: Right now.
Goldfinger: Okay, that was easy! Great conversation as usual Bob, thank you for your time and insights. I’m going to mark this date October 8th on the CVX and XOM charts.
Disclosure: Author owns BRC.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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