The Fed, the Coronavirus and Investing
Stock-Markets / Financial Markets 2020 Mar 28, 2020 - 01:42 PM GMTBy: The_Gold_Report
Maurice Jackson of Proven and Probable speaks to Bob Moriarty of 321gold about his thoughts on the current financial markets and investment opportunities.
Maurice Jackson: Welcome to Proven and Probable. Today, we will discuss the Fed, the coronavirus and your investment portfolio.
Joining us for a conversation is Bob Moriarty, a world-renowned, best-selling author and founder of the websites 321Gold and 321Energy.com.
In our last interview: "You Can Take This To The Bank," we discussed Bursting Bubbles. Since then, we've had two significant developments. The first, by the Federal Reserve, implementing an emergency haircut of 50 basis points. And the second is the outbreak of the coronavirus.
Bob, the Fed is saying to the citizens, "We had to reduce rates because of the coronavirus." Was a Fed haircut warranted because of the coronavirus, or because something else that they're not telling us?
Bob Moriarty: Well, I've said in three or four articles recently, governments lie, and they lie about everything. Anybody wants to go back to my site, go to the archives, and on the first of January, I put out a piece saying, "Beware of the stock market," and I said the bubble was going to burst.
We have the highest measure in the Fear and Greed Index that we've ever had, and all you had to do is look at that one indicator and say the Everything Bubble was going to pop soon. The Fed has painted themselves into a corner, and they're trying to pump up the stock market, using interest rates. It's always worked in the past. I've said, multiple times, these things work right up until the time they don't. Clearly now, it hasn't worked, and things are going to get far worse. We're just starting the crash, we're not at the end of the crash.
Maurice Jackson: You know, speaking of that crash, now how does the coronavirus fit into the narrative here?
Bob Moriarty: It's the biggest Black Swan in history, far more dangerous than the governments are telling you. Let me give you some numbers I just pulled up.
On February 29th, the U.S. has 68 confirmed cases. Now, they have 338, that's 4.9 times, in one week. Germany had 79, now they have 670, that's an increase of 8.5 times in one week. France had 100 then, they have 653 now. The best estimates that I've seen indicate the lowest number of deaths will be around 15 million, and that's on the low side. This thing is twice as deadly as the Spanish Flu of 1918, and that killed somewhere between 40 and 100 million people.
Maurice Jackson: What kind of impact will this have on the global economy, basically?
Bob Moriarty: Well, the global economy, as I just said, was a bubble searching for a pin, and it just ran into a giant pin, but it was going to burst anyway. We're going to go through a crash that's far worse than 2008, and that would be true if there was a coronavirus or there wasn't a coronavirus.
Some of the things that are right in front of us and everybody's ignoring is 80 to 90% of medications come from China. And China's going to be shut down for the next three to six months. This is staggering, it's going to be the most significant geopolitical event in history.
Maurice Jackson: That's a very bold statement, sir. We're going to discuss some investment opportunities in a moment. But, what are some common sense, precautionary actions that you're taking, should things turn for the worse?
Bob Moriarty: Well, that's really funny, okay? It's already turned for the worst. I'm over 70, and I'm in a very high risk category. My solution is to stay off the grid for three to six months. I've spent the last months preparing, and I can stay off the grid for three to six months. But things as simple as toilet paper, hand sanitizer, medication, these are all things that should be available now, but in a week they won't be.
Maurice Jackson: Of the two, I'm assuming, here, from a global economic standpoint, which one as a bigger impact right now, the coronavirus or the Fed?
Bob Moriarty: Oh, the Fed's meaningless. The Fed's pissing up a rope. The Fed's totally impotent.
Maurice Jackson: Well, moving onto investment opportunities, let's begin with TriStar Gold Inc. (TSG:TSX.V). You had boots on the ground, there, on a site visit on Para State, Brazil. I know you have some exciting intel to share with us. Sir, please introduce us to Tri-Star Gold?
Bob Moriarty: Well, in some ways you know more about it than I do. We all flew into Sao Paulo, and then we took a two hour jet to somewhere, literally I never did figure out where we went. Then, we took an hour and a half flight on a small airplane, so you know it's in Para State. If you asked me to locate it, on a map of Brazil within 500 miles, I really couldn't do it. I mean I feel totally ignorant.
But, it's a really interesting deposit. It's a conglomerate deposit, which Quinton Hennigh is easily the world's best expert on. It's interesting to me, because I thought I had a pretty good clue as to how conglomerate systems worked. And basically, they got a big plateau, and every creek running off the plateau had been mined by alluvial miners. Barrick Gold came in and said, "Look, there's got to be some gold up there." So, they drilled, and proved up a resource, and determined that was gold and the recovery was economic, but interestingly Barrick walked away.
Tri-Star picked up the property; they have a resource. They know exactly how to drill. It's one of the best teams that I've seen in a company for a long time. They have Brazilian geologists that have strong commercial and technical skill sets, and I was really impressed with the company. Interestingly enough, I was equally impressed with Dr. Quinton Hennigh, because I thought I knew conglomerate systems. He sat down and gave us a 30-minute briefing. I learned a lot of things that I, frankly, didn't know. I participated in the private placement, and I really liked the value proposition of Tristar Gold.
Maurice Jackson: Now, in your opinion, talk to us about the potential size and scale of the project?
Bob Moriarty: Probably 2 to 3 million ounces.
Maurice Jackson: That big?
Bob Moriarty: Yes.
Maurice Jackson: Don't take Bob's word for it. Royal Gold is a stakeholder in Tri-Star (Press Release), which speaks volumes on the opportunity, potential and scale before us. We had an opportunity to interview CEO Nick Appleyard, back in August. It's a really compelling story. You can find the interview on our website, under exclusive interviews, entitled, "Tri-Star Gold Project in Brazil Offers Simplicity, and Potential Scale."
Staying in the Southern Hemisphere, let's visit the Congo, where you just introduced Loncor Resources (TSX:LN). Sir, who is Loncor Resources, and what is the opportunity they present to the market?
Bob Moriarty: Here's what's absolutely amazing, I'm glad you brought that up. Loncor Resources approached me, I had never even heard a whisper of the name, I had no clue as to who they were. I went looking into it, they have an incredibly massive land position, in the Democratic Republic of Congo, the DRC.
Barrick Gold has several gold mines there, in the Greenstone Belt, and across the border in Tanzania. Barrick Gold has some of their other really giant mines. Loncor has, in their wholly owned properties, resources of about 2.4 million ounces. They've got joint venture with Barrack, on a big piece of their property, like 3000 square kilometers, which is a really big project. Barrick is funding it to feasibility, they're paying everything. Barrick runs the project, and Barrick spends the money. There are no particular limits on what Barrick can spend, they can spend anything they want to. They've got a drill program that's literally starting right now.
If you look at any stock, you want to figure out what the basement is, what is the lowest price the stock can go to? If you ignored the JV with Barrick, which would be a foolish thing to do, but if you ignored it, you're buying ounces of gold, in the ground, for $19 an ounce, U.S. So, I don't think there's any downside to it. Approximately 70% of shares are in the top three or four shareholders. I think Loncor Resources is a great stock, because if you like gold, and I think after all of the things that I've said over the last 15 years, anybody who doesn't like gold right now is economically illiterate.
Maurice Jackson: You know, you said that lightly, $19 an ounce.
Bob Moriarty: Yeah, yeah. How can you go wrong? At the stage they're operating, they should be getting $50 or $60 bucks an ounce.
Now, one of the things that we haven't gotten into, and we need to get into is, one, the T-bond, and, two, what I see happening to gold and gold shares. The T-bond Daily Sentiment Index (DSI), on Friday, hit 98. That is the highest rating I've seen, on the Daily Sentiment Indicator for any commodity, ever. Therefore, the T-bond's going to crash, it's probably going to take gold with it. Gold had a DSI of 96 a couple of weeks ago.
Everybody hates it. They act like, "Oh my God, you say that gold's going down. My God, I hate you!" The corrections are perfectly normal, and we're going to have a correction in gold, and we're going to have a correction in palladium, and we're going to have a correction in rhodium. We're going to go into the biggest financial crash in world history, and most asset classes are going to get sold off. That's not a bad thing, that creates opportunity, but you've got to be flexible, and hopefully liquid.
Now, I am not saying, "Go out and sell everything you've got." Every time I say we're going to have a correction, "Oh my God, you told me to sell everything." Well, that's not what I said, not at all. I said we're going to have a correction. At the end of the correction, gold and silver and platinum are going to be a lot more valuable. We're going to do exactly what we did in 2008. A lot of stocks were down 70% or 80%. Most of the big ones, the ones that I like, Lion One Metals, Novo Resources, Irving Resources, Barksdale Capital, these stocks are down 30 or 40% since the first of the year, when I said, "Beware of the stock market."
I'm not saying something's going to change on Monday with gold shares, gold shares have been going down for two months.
Maurice Jackson: You referenced Jake Bernstein's work on the Daily Sentiment Index. What are the parameters that you referenced regarding buy and sell indicators?
Bob Moriarty: The DSI measures sentiment. Most investor look at fundamentals, technicals, worry about the interest rates, worry about the Fed. That's all bull. People buy stocks because of emotions, and they sell stocks because of emotions. If you can measure those emotions accurately, you'd make a lot of money.
When 98 out of 100 people say something is going to go up, and it doesn't make any difference what it is, or what the fundamentals are, or what the Fed does, or what the economy does, or what interest rates do, when 98 out of 100 people say something is going to go up, the next move is down. That is the highest number I've ever seen. Anything above 90 says the top is near, and anything below 10 says the bottom is near. 98 is such an extreme measure, that I'm perfectly comfortable saying that, you and I are talking on Saturday, and on Monday, T-bonds are going to go down.
Maurice Jackson: Mark the words, there. Which metals have your attention, and why?
Bob Moriarty: Silver and platinum, strange enough, you sent me some information (click here). There was a fire, an explosion at a platinum processing place in South Africa, and the real story is the price of platinum is so far below the cost of production, they've got to shut production.
Nobody wants to admit this, everybody's got their own pet theory, but the fact is supply and demand does work. You cannot have the price of any commodity below the cost of production for very long, or things are going to happen. People are going to shut down production whether it's wheat, whether it's gold, or anything else. The silver gold ratio got above 100 to 1, that's the highest it's ever been. I think it got up to 102, intraday, a week ago. Silver was very cheap, relative to gold, but that doesn't mean silver couldn't correct. I own a lot of silver, and I own a lot of platinum, and a little bit of gold.
Maurice Jackson: Just as a reminder for our readers, I'm a licensed representative for Miles Franklin Precious Metals Investments, so for your next bouillon purchase, please give me a call. That's going to be at 855-505-1900. Or, you may email me at contact@provenandprobable.com.
In closing, sir, what keeps you up at night, that we don't know about?
Bob Moriarty: Actually you're going to hate me for saying this. I was a fighter pilot when I was 20 years old, I'm really good in emergencies, and nothing keeps me up at night because I can see things clearly in advance. I am going to take credit, I saw the stock market crashing, I said it was going to crash on January 1st.
On January 27th, I said the coronavirus was going to be a nuclear explosion to the world's economy. On February 27th, I repeated that, and said the greatest depression is here, this is no drill. I am going to take credit, I absolutely called it correctly, and anyone who is not prepared better get prepared, now. I'm prepared, so I sleep really well.
Maurice Jackson: Likewise, you and I have been having a lot of correspondence in between interviews, as we always do. We've had a lot of discussions in reference to preparation, and it makes a lot of sense. I think you said it best. "It's best to panic early."
Bob Moriarty: Here's the deal. If you're inclined to panic, you always want to panic early.
Maurice Jackson: All right, sir, last question. What did I forget to ask?
Bob Moriarty: I don't think so, I think that was pretty comprehensive.
Maurice Jackson: All right, sir. Bob, for someone listening that wants to get more information on your books, and your work, please share the website addresses?
Bob Moriarty: 321Gold.com and 321Energy.com. All you have to do is go to Amazon, and feed in Bob Moriarty, and six of my books are listed there.
I will say, in hindsight, there are some things in life that should improve with age. Wine is one, good women is one, and good books. Books that I wrote two and three years ago are incredibly timely now, because much of what's happening today is stuff I was telling people how they could prepare for years ago. I'm quite proud of that. I mean, if somebody can't afford $15 bucks for one of the books, they should go buy something valuable like marijuana stocks, or Tesla, or "Bitcon."
Maurice Jackson: One of the inquiries I receive often, after our interviews is, "Why do you always reference Bob's books?" My response is, "You obviously haven't read them." "No, I haven't." When they take the initiative to get one of your books, and then they're like, "I get it! This man is brilliant, he's a genius!
Bob Moriarty: Don't say that, because I don't actually believe that's true. Okay? I have the ability to think for myself, and I have the ability to take my thoughts, and put them into very clear terms. Now, I will challenge anyone whose going to waste their valuable time listening to this, go to Amazon, pull up the reviews on Basic Investing in Resource Stocks, it has the highest reviews of any book that I've ever seen on Amazon. Now, it doesn't make a rat's ass what I think of the book, it doesn't make a rat's ass what you think of the book, what makes a rat's ass is what do readers think of the book, and they all say, "This is the best book I've ever read on investing."
To that extent, I certainly do not need the two or three bucks I get from a book, that's absolutely meaningless. But, those are valuable books, and they will help you either make money, or save money.
Maurice Jackson: There you have it, folks.
As a reminder, I am 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 bouillon sales. Subscription is free.
Bob Moriarty of 321Gold, and 321Energy, thank you for joining us today on Proven and Probable.
Bob Moriarty: Anytime, Maurice. Thank you for the time.
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.
Disclosure: 1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. 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: None. 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. 3) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Lion One. Click here for important disclosures about sponsor fees. 4) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 5) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Irving Resources, Barksdale Capital and Royal Gold, companies mentioned in this article.
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