Maurice Jackson: Joining us for our conversation is Bob Moriarty, a world-renowned bestselling author and founder of the websites 321gold and 321energy.com. For audience members, today we will hear from one of the most respected minds on the subject of geopolitics and investing, as we will discuss the impeachment trial of President Trump, bursting bubbles, and some very, very unique buying opportunities for your portfolio.
Bob, the impeachment trial of President Trump is dominating the news as the world is glued to their television sets with popcorn and soda in their hand, asking whatever happened to the United States of America? How does Bob Moriarty view the impeachment trial of President Trump? Is it warranted?
Bob Moriarty: There was a book was written in the 18th century and called Decline and Fall of the Roman Empire by Gibbon, and I think there were six volumes to the set. If you want to understand what the United States is going through today, you need to read Decline and Fall of the Roman Empire. We are experiencing the end of empire. There were two recent events, one being the murder of General Soleimani and the other the impeachment. We're going to look back on this and a few years from now and say, "Were these people totally insane?" Now would you agree in general, that the thesis of the Democrats is that we need to impeach Trump to prevent him from being re-elected 2020 on the basis that he was using his political power to affect an election? Would you agree with that statement?
Maurice Jackson: I would agree with that statement.
Bob Moriarty: Now would it also be true that what the Democrats are doing, is they're using their political power to affect an election?
Maurice Jackson: I would completely agree.
Bob Moriarty: Would you agree that is factual that what the Democrats are accusing Trump of doing, is exactly what they're doing. Would that be correct?
Maurice Jackson: That would be definitely correct.
Bob Moriarty: Okay. And that's bizarre. There's actually only one, there's one guy in the whole circus who seems to capture the insanity so far. Do you have any idea who that is?
Maurice Jackson: I would say Donald Trump.
Bob Moriarty: Oh, heavens no, that guy, he lost it years ago, pardon my French. No, Donald Trump's a goof. I mean, the crazy thing is, what do you think he whacked Soleimani for? That was straight out of the movie "Wag the Dog," what's good enough for Clinton to do, it's good enough for Trump to do. No, there's one person who's actually captures the insanity. And interesting enough, there's a direct connection, remember the fiasco over the OJ Simpson trial in California?
Maurice Jackson: I recall it, yes.
Bob Moriarty: Okay. There was only one person in hindsight who was actually saying, and I can't actually remember who it was, okay? Which embarrasses me a little bit because my memory is no good. But there was somebody that Rolling Stone had given a $50,000 check to, to listen to the trial and write a book. And the guy listened through the entire thing and the trial was over and Simpson got off. What do you suppose the guy did?
Maurice Jackson: I'm not familiar with this at all but I will assume he published the book.
Bob Moriarty: No, he tore up the check, called up Rolling Stone, and said, "This thing is such an embarrassment that I just couldn't possibly associate something so corrupt. Everybody in the courtroom, was lying. Everybody in the courtroom was playing games and I don't want to have anything to do with it, so I'm not going to charge you and I tore up the check." The only sane person so far and only time will tell if he will be able to keep his sanity is Justice Roberts. And he said, "You guys are acting like kids. This is the Senate, grow up punks."
Maurice Jackson: What has you most concerned about the impeachment trial? And what should we keep our eyes on?
Bob Moriarty: The fact that an impeachment trial exists in the first place. It's an absolute circus and a joke. I don't like Trump. I think the man is a buffoon as you can tell I'm not a Trump fan, but he is certainly not nearly as corrupt as Hillary Clinton. And if Americans want to throw Donald Trump out of office, they've got the opportunity to do that this coming November. The Democrats are not only trying to affect the 2020 election, they're trying to affect the 2016 election.
Now, here's what's amazing about it. It cannot possibly get any better as it will only get worse. I'm old now, and but having the voters select the president, I think that's just a dandy idea and it is a great way to pick your leaders. When the CIA, and the DOJ and the NSA and the FBI start thinking, "God, we're doing so great with all these wars all over the world and all these regime changes, we're so successful, we need to do it to the U.S." And they failed and they just cannot come to grips with, "Jeez, nobody believes our bull that the Russian did it." Well, no kidding! And the only question is can Justice Roberts maintain his sanity and that's kind of 50-50 right now.
Maurice Jackson: You reference some players that I want to talk about, they're called the deep state. What is their level of involvement in the impeachment process?
Bob Moriarty: 100%. Regardless of whether you love Trump or whether you hate Trump, it's going to be obvious in six days or six months or six years, that this whole thing was a fiasco and extremely damaging to the reputation of the United States.
Maurice Jackson: Let's move on to bursting bubbles and there are quite a few we can name here, we have government debt, interest rates, the repo operation, student loans, the Dow and the S&P 500 and real estate. Which bubble or bubbles should we be concerned with the most and why?
Bob Moriarty: All of them.
Maurice Jackson: In your book Basic Investing In Resource Stocks, you're quoted as saying "that every debt gets paid. If not by the borrower, then by the lender."
Bob Moriarty: That is correct.
Maurice Jackson: Talk to us about the fallout that may occur from any one of these bursting bubbles.
Bob Moriarty: Well, here's the key, have you ever seen a child play with a jar of soap and one of those where they blow into it and lots of bubbles come out?
Maurice Jackson: It has been while but, yes, I do recall.
Bob Moriarty: Okay, when you're watching a child do that, which bubble burst first?
Maurice Jackson: I actually never paid attention, I would assume the one that's blown out first or the one that is farthest away.
Bob Moriarty: Who cares?
Maurice Jackson: Okay, there you go. That's why I never noticed.
Bob Moriarty: And as a follow-up answer to that is if a child sitting there blowing bubbles and the child blows 50 bubbles, one of them is going to burst first. But it really doesn't make any difference. But what do we know about the other bubbles?
Maurice Jackson: They will eventually burst as well.
Bob Moriarty: They're all going to burst too, that's the nature of bubbles. If they weren't bubbles, they wouldn't burst. They are bubbles so they will burst. Now here's the key, and it's very important, and this is the key point, everybody listen carefully, write it down, take it to the bank and you can cash this. No matter how well prepared you think you are, it's going to be worse than you can imagine and everyone, no matter how well prepared, is going to be damaged.
There was a good piece today that I printed out, there was a report (click here) that only 41% of the Americans could come up with $1,000 cash to pay an emergency bill, and that's interesting because 41% is not very high and what the real thing is, 59% could not come up with a $1,000. A lot of people are going to get hurt, it's going to be ugly.
Now, I wish I could show it to you because I saw a chart yesterday. If you remember a year ago, I was saying that we were going to have a crash in October. And of course I don't feel like a blathering idiot now because we didn't ever crash in October and actually I'm not that big an idiot because I saw a chart of the stock market from the 1st of October until now and it's gone up, but about a 45 degree angle. There has been no setback whatsoever. It's virtually gone straight up. And that's very interesting because what's key about the timeframe around the 1st of October, what happened?
Source: Google.com
Maurice Jackson: Well, we had the repo program, is that correct? Is that what you're relating to?
Source: Google.com
Bob Moriarty: Correct, on September 17, the Fed started pouring money into the system and if you look at chart of the Dow and the S&P, you realize that both of them have gone straight up since the 1st of October. Now that means that if I was wrong about predicting a crash, there are some blithering idiot at the Fed who's just as wrong because that's exactly what he was trying to prevent. And that's what the repo madness is about. Now, anybody who thinks, well, they can cure this problem. I want you to go down to a store and I want you to buy a balloon and I don't give care how big the balloon is, get any sized balloon. Blow into the balloon, and just keep blowing and when finally figure out what's going to happen, give me a call back and say, "Bob, I didn't realize it was going to blow up." But it's going to.
Maurice Jackson: Not if, but rather when, the bubbles burst, do you believe we'll see blood in streets? Because I can foresee protests and riots as the masses will look to blame someone, something for their losses.
Bob Moriarty: Absolutely. There's no question, we're being set up for it now. The only issue in my mind has been well, will the blood in the streets be in the nature of a revolution or a civil war? I think it's fairly clear it will be a civil war. It is scary to me the absurd positions politicians and leaders, and I put that in quotation marks, are taking because they are so inflammatory. I mean, Elizabeth Warren's a real piece of work, she states, "Well, we need to forgive all the student debt." Interestingly enough, the $1.7 trillion of student debt is the largest cash asset of the United States government. And she's saying, "Well, we should just forget it," which means she's saying the taxpayers should pay for it.
When you listen to AOC or when you listen to Bernie Sanders, or when you listen to Warren, none of them will discuss who's going to pay for all this debt! And the fact is, it's always going to be the taxpayers. We're coming to a fork in the road and both directions lead into a dead end. There are no good solutions. There are no solutions. It's going to blow up, it's going to be ugly.
Maurice Jackson: Sir, you're one of the most serially successful investors in the world. And for the person listening that doesn't want to become lost with the madness of the crowd, are physical precious metals, the most proven alternative for one to consider based on the afore mentioned?
Bob Moriarty: Yes!
Maurice Jackson: Which precious metals are you buying right now?
Bob Moriarty: Oh, that's very funny. I'll tell you what I'm not buying. And I'm not buying rhodium.
Maurice Jackson: But we weren't saying that in the summer of 2017.
Bob Moriarty: That is correct, in 2017 rhodium was cheap. It is not cheap anymore. The strange thing is, and I realized something, this is really key. I'm glad that you got to ask that question because it gives me a lead in by every measure of the Daily Sentiment Index (DSI) or the Commitment of Traders (COT) or the Open Interest, gold should have had a correction. Now, will you agree? Do you agree with that?
Maurice Jackson: I don't agree with it.
Bob Moriarty: Well, you should. Because believe me, the DSI, it's very valuable in COT and worded extreme and the volume, same word extreme. We should in quotation marks, have a correction. I love corrections. I mean corrections give you the opportunity to get in cheap. And if you like gold at 1560, how are you going to love it when it's 1000 bucks? Okay, that's a better deal.
Maurice Jackson: I absolutely agree with you there.
Bob Moriarty: But here's what's happening. And unfortunately you're sort of right. The Bank of International Settlements (BIS) has changed the definition of gold to make it a tier one asset. It was a tier three asset. And what that means is that these central banks were able to use gold as a form of reserves, but they only got credit for the artificial $42 an ounce figure rather than the actual figure. And the BIS said, well, that's really stupid because gold's a lot higher than that. Gold is now a tier one asset and you can put it on your books, at its real value. And what that means is the central bankers, and while they're jackasses, they're not stupid. Some of these guys actually passed Economics 101 they know disaster's right around the corner and they're doing exactly what prudent people in the world should do, they want to own precious metals.
And if you can use gold as tier one asset, there has been artificial buying into gold and while it should have corrected, the corrections have all been very minor and they don't last for very long. And the central banks are loading up on gold like there is no tomorrow. And that leaves an opportunity for people who have read my books Nobody Knows Anything and Basic Investing in Resource Stocks and spent 12 bucks on it, and if you buy a book, I get to buy a Starbucks.
In both books, I make the point very effectively that you should buy what's cheap and to sell what's dear. Silver is very cheap, the ratio of silver to gold was about 86 to one; that's very near record high. And platinum is the cheapest to gold it's ever been. Platinum and silver are exceptionally cheap. Rhodium is off the chart expensive, palladium is off the chart expensive and gold's expensive because of the central banks. But platinum and silver will catch up. So you're going to see some extraordinary moves in those two metals.
Maurice Jackson: And I was basing my response actually on Basel III, which passed BIS in April of last year.
Moving onto buying opportunities for your portfolio. You and I were discussing some buying opportunities that have your tenseness. Let's share them with the audience members beginning with Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX).
Bob Moriarty: Lion One was number two out of 50 stocks on the OTCQX (Click Here) exchange in the United States for last year. The performance was extraordinary. They've made a transition from a good story into a great story. It will continue to get better. It's not as cheap now as what it was a year ago, but it's a lot cheaper than what it's going to be a year from now.
Maurice Jackson: I believe it's actually doubled since November, if I'm not mistaken and they're doing a remarkable job there. And that's Walter Berukoff there, he was a CEO with Lion One Metals, moving onto Hannan Metals Ltd. (HAN:TSX.V; HANNF:OTCPK).
Bob Moriarty: Hannan has two projects. A zinc property in Ireland that has an intrinsic value worth as much as the entire company's market cap and because everybody hates zinc now they're not even mentioning it. But they found some sedimentary copper near surface oxide in northern Peru. They've staked a bunch of it. Hannan is was one of my 2020 number one and two picks. Hannan has up about 150% in the last six weeks.
Maurice Jackson: How about Irving Resources Inc. (IRV:CSE; IRVRF:OTCBB)?
Bob Moriarty: Irving has just announced some really good results. And it was funny because nobody understood the results. Irving announced, "This is what we've found when we were drilling up the mine." And everybody goes, "Oh, that's boring. I want a 20 ounce gold." The funny thing is the high grade gold should not be at surface. It should be 350 meters deep and all these intercepts are near surface, which means there's a lot more really good stuff when you get deep. But they announced some good results, stock's down a little bit, stock's still exceptionally cheap compared to what it'll be a year from now. But they're going to announce hole 10, and I don't know what hole 10 is going to have. I just know that every time somebody says the word hole 10, Quinton Hennigh gets a big, grin up on his face.
Maurice Jackson: Let's take the conversation now to Australia. Let's talk about Novo Resources Corp. (NVO:TSX.V; NSRPF:OTCQX).
Bob Moriarty: Novo is making great progress. I was aware there was some behind the scenes discussion with the creditors of Millennium. Millennium has gone into bankruptcy and don't hold me to the strict legal term. And the creditors now control the asset and the mill and they are in discussions with Novo, wanting to buy the mill. And the beauty is that the creditors have very deep pockets. The money's not important to them. So I think they'll do a very favorable deal with Novo, that would be very favorable for them.
And that would put Novo in production literally in a couple of weeks or a couple of months. And meanwhile they're making great progress with the sorting machines at Egina and I expect once summer is over there, they'll be in production this year. Big progress being made by Novo. And here's a real key, and nobody quite understands this, Novo's got so much ground that they're going to be doing exploration a hundred years from now. Okay. It's far bigger than any one company ever had, and in the Witwatersrand. So investors need to be patient. The gold is there but they got to go out and count it.
Maurice Jackson: Let's take the conversation now to Brazil and talk about TriStar Gold Inc. (TSG:TSX.V).
Bob Moriarty: Tri-Star is an interesting situation because it's another Witwatersrand analog and they've got good gold there and they can define as many ounces as they want. All they have to do is go drill. Their single issue has been a lack of visibility, but really good management, really good project I think it will do very well.
Maurice Jackson: There's a common theme in all the companies we've referenced and it's the individual by the name of Dr. Quinton Hennigh. I learned years ago from you that you follow the right names that have a proven pedigree of success. Just for someone new to the name, can you just talk to us a little about who he is? Dr Quinton Hennigh, sir.
Dr. Quinton Hennigh
Bob Moriarty: You just burst my bubble. You don't have to be smart to make money. You can be dumb and make money, but if you're dumb and you want to make money, you need somebody who is smart and you need to follow him. So I am not some kind of genius investor. Okay? I'm just dumb. However, I am smart enough to know Quinton Hennigh. And he and I drove to Rattlesnake 11 years ago, we spent about six hours going up and about six hours coming back. We have spent weeks together visiting projects in New Zealand, in Australia, in Africa. Quinton is my best friend. He's been wonderful and thoughtful after my wife Barbara died, which was pretty tough for me. But you can spend 15 minutes talking to Quinton and learn more than you would learn in a semester in a geology course.
I only know two or three guys in the entire industry that have the ability to share information that well. And he's one of them. I always say he's in the top five geologists in the world, but I think clearly he's probably the best. Not every single project works. However, Quinton is straightforward and honest. He communicates well. And he's a really interesting guy. He doesn't dress very well. Actually he's a bit of a slob. But he's a fabulous guy. And it's probably one of the safest investments you can make, if you see a name associated with Quinton Hennigh, you should probably buy it.
Maurice Jackson: Truly good words of wisdom here. Before we close on buying opportunities, let's go to Montana and talk about Group Ten Metals Inc. (PGE:TSX.V; PGEZF:OTCQB; 5D32:FSE). What can you share with us?
Bob Moriarty: Interesting situation there. Now my feeling is palladium is way too expensive and platinum's way too cheap. Investors tend to say, well, palladium's expensive because it's used for gasoline cars and platinum's cheap because it's used for diesels and they're not popular, but that's way too simplistic. You can exchange platinum for palladium and the reason so many automobile manufacturers are using palladium now is because platinum was too expensive. But palladium's not going to sit at $2,300 bucks and platinum sit at $1000 forever. Because there is a relationship. Platinum has a density of about 21 I think palladium's about 11 to one. It takes a lot more palladium in a catalytic converter than it does platinum.
So the automobile manufacturers, it has cost them something like $18 billion, because the price of palladium went up. And sooner or later they'll say, screw it, we got to bite the bullet and they'll just switch over to platinum. Platinum is an exceptional deal right now, regardless of what you think is going to happen in the world economically. In relative terms palladium's expensive, platinum's cheap.
Maurice Jackson: You talk about the team there, you got to Greg Johnson and the CEO, Michael Raleigh there. And for someone who's not familiar with the value proposition in platinum, if I can just expand on that, and you can correct me if I'm wrong please, 78% of the world's platinum comes from one country, South Africa, and its costs of production is, I believe, at $1,100 right now. And that's a process that can't continue.
Bob Moriarty: No, it's worse than that. They have socialist government in South Africa and they set the price of electricity below the cost of production. So the mines there are getting stiffed. 78% of the platinum and 45% of the palladium. But Group Ten has just drilled a couple of the greatest platinum, palladium, rhodium holes ever drilled, and they appear to have the other half of the Stillwater complex deposit. And it's amazing to me, there's three or four platinum palladium companies that I can think of and they're just not getting the credit that they should. They had some extraordinary results (click here) and the market yawned.
Maurice Jackson: I would agree with you and for all of the companies that we've referenced, they're sponsors of Proven & Probable and 321gold. And we are current shareholders. In closing, sir, what keeps you up at night that we don't know about?
Bob Moriarty: Everything.
Maurice Jackson: You sound like me. If there's one thing in particular, what would it be?
Bob Moriarty: Here's what's really funny, anyone who is sane and sober, who is aware of what's going on in the world today politically and economically, deserves to get really, really drunk. That would be the only indication that you're sane.
Maurice Jackson: And if I may ask, what would you be drinking?
Bob Moriarty: Anything.
Maurice Jackson: Anything. All right, last question, sir. And that is what did I forget to ask?
Bob Moriarty: I think you did a pretty good job.
Maurice Jackson: Well thank you, sir. Bob, for the readers that want to get more information about your books and your work, please share the website addresses.
Bob Moriarty: Amazon has both books or you can go to our website and we've got links on the website. And here's what's really interesting. If you're even tempted to think about buying the books, do not listen to me, do not listen to Maurice, go to Amazon and read the reviews. The last book that I wrote, Basic Investing in Resource Stocks, has the highest ratings that I've ever seen on a book on Amazon. And that's from ordinary readers who put their opinions in and they think it's a great book. So don't believe me. I mean, I'm the guy who makes five bucks every time they sell a book and I can use the money, but listen to the reviewers and at what they've got to say about the books. I'll be real candid, anybody who is investing money, who hasn't got 12 or 15 bucks or whatever it costs to buy one of those damn books, is a blithering idiot. It will pay for itself the first time you do a trade.
Maurice Jackson: Well, I don't benefit financially from the sales of the book, but I have benefited exponentially and I want to underscore that, exponentially, from the investment. It's a small tuition cost and you're learning from one of the best minds. One of the most proven minds in the space.
Before you make your next bullion purchase, make sure you call me. I'm a licensed representative for Miles Franklin Precious Metals Investments where we provide a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs and private blockchain distributed ledger technology. Call me directly at (855) 505-1900 or you may email maurice@milesfranklin.com. Finally, please subscribe to www.provenandprobable.com where we provide mining insights and bullion sales. Subscription is free.
Bob Moriarty of 321gold and 321energy, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
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Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: All are sponsors of Proven and Probable. Proven and Probable disclosures are listed below.
2) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: All of the companies mentioned are sponsors of 321gold.
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