Bob Moriarty – Bitcoin to Zero

In this episode, Bob Moriarty the founder of 321gold and 321energy.com sits down with Maurice Jackson of Proven and Probable to discuss his thoughts on Bitcoin, Gold, Silver, Platinum, Palladium, Rhodium, and 3 issuers that have this attention at the moment. Bob pulls no punches on his where he sees Bitcoin heading and addresses time tested alternatives where he is allocating his capital. In addition, Bob conveys his concerns that on the financial obligations that Hurricane’s Irma and Matthew may present to the United States. Action packing interview always with the legendary Bob Moriarty!

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Maurice Jackson:

Welcome to Proven and Probable, where we focus on metals, mining, and more. I’m your host, Maurice Jackson. Joining us for a conversation is Bob Moriarty, the founder of 321Gold and 321energy.com, and the author of two of my favorite books, ‘Nobody Knows Anything’ and ‘The Art of Peace’. Bob, welcome to the show.

Bob Moriarty:

Thank you. It’s good to be here.

Maurice Jackson:

Always a delight to have you on our show. Bob, you and I were talking offline about cryptocurrencies and, specifically, Bitcoin and the concerns you have for speculators at the moment that are chasing the new highs. But before we delve into the current market price of Bitcoin, I want to reference Jamie Dimon, the CEO of JPMorgan Chase and what he had to say regarding Bitcoin, as he stated that “Bitcoin is a fraud”. I have a two-fold question for you here. Do you agree with the narrative and can you share with us Bob’s perspective on cryptocurrencies?

Bob Moriarty:

The interesting question is not whether Bitcoin is a fraud, but is Bitcoin a tulip bulb or is Bitcoin a Beanie Baby? I’ve been saying for weeks, if not months, absolutely yes. The theory of Bitcoin having value is, one, that it’s limited in quantity, which is true, and two that it’s free of government interference. Well, while it’s true that while Bitcoin is limited in quantity, the number of Bitcoins are not limited. There are 600 different variations of Bitcoin now, and they’re certainly not limited, and if you can have 600, you can have 6,000. The other theory being that it’s free of government interference, China has just made it illegal and proven that that’s not true.

I wouldn’t go so far as to say Bitcoin is fraud, but Bitcoin has absolutely no value now, and it’s going to cost people a lot of money. Okay, it’s gone from 4,700 to 3,500 in a week, and it’s going to go from 3,500 to zero. Now, it might go from 3,500 to 10,000 first, but it’s going to end up being zero. Bitcoin is a pseudocurrency. It’s no more suitable as money than salt or big round rocks.

Maurice Jackson:

Bob, for those that have not read your book, Nobody Knows Anything, allow me to ask you, what we know the answer to, is, should speculators buy, hold, or sell Bitcoin at current prices?

Bob Moriarty:                    Well, the most important issue is always asking the right question, and if you ask a slight variation, a lot of times it would give you a better answer. Perhaps a better question would be, ‘Should speculators buy, sell, or hold tulip bulbs?’ And my answer is, if you’re not a gardener you don’t need tulip bulbs, and if you’re not a five year old child you don’t need Beanie Babies. Bitcoin, and all the 599 other variations, are a pseudocurrency of no particular value.

If you want to chase something in the hopes that there are some greater fools, it’s perhaps true. And I absolutely cover this in my book, and I absolutely tell people, ‘learn to think for yourself.’ The mere fact that other people are suggesting that there’s value to Bitcoin doesn’t make it true. If you can’t look at it say yeah, I see where the value is, and there isn’t any value there and it doesn’t make any difference how many damn fools say there is value there. There isn’t any value to it.

Maurice Jackson:

Very well said here. Switching gears, let’s move to precious metals. Gold has held above 1300 for a couple of weeks, which is encouraging for the natural resource base, and silver has been touching $18 with a current ratio of 74:1. Should we be encouraged by the prices, or is this just a head fake?

Bob Moriarty:

I’m on record as saying we’re in a bull market, and I think we are in a bull market. We’re in kind of a weird correction right now. Two months ago at the full moon, we had a very clear bottom in early July that I predicted as early as May. It went up to about 1,360 something, which is very favorable. It’s come back down. I believe that 1300 will hold, I believe we’re in kind of a weird little correction, but I believe prices are gonna go a lot higher.

One of the things people need to think about is sometimes external events do effect the price of gold and silver, and these two hurricanes, Harvey and Irma, are gonna cost the United States a lot of money, actually cost everywhere they hit a lot of money, and I don’t think it’s insured, and I don’t think the government has the ability to step in or replace the losses. These are probably 100 billion dollar losses for each hurricane. That could be the straw that breaks the financial camel’s back.

Maurice Jackson:

You know Bob, you referenced the full moon thesis. For those that are not aware of it, can you please share that with us?

Bob Moriarty:

Well it’s not something that I came up with, but I’m certainly happy to take credit for passing it on. Tom McClellan of McClellan Research set out … He had heard prices change at full moon and he set out to disprove the thesis, and he found out that actually full moons do tend to indicate either turning points, or an acceleration in the direction that something is moving.

And if you go back, anybody can do this, just take a look at a chart of full moons and look at what gold, silver did in July, and then look at what they did here a few days, I think on the 6th of September. It appears to be true. And I don’t use it as gospel, but it’s something that I pay attention to. If you’ve had a big, long correction and you’ve got a full moon coming up, it’s entirely possible that could be a turning point.

Maurice Jackson:

Not a lot of attention gets placed on platinum, palladium, and rhodium. Are you surprised that palladium is nearly the price of platinum?

Bob Moriarty:

Yes, and I think it creates a great opportunity as I mentioned several times in the book. You can take advantage of differences between commodities that don’t make rational sense. For a lot of reasons, platinum is more valuable than palladium. As a catalyst, it requires more palladium than it does platinum. And more palladium is produced, so palladium is typically cheaper than platinum. It’s very close to the price of platinum right now, and also historically platinum has had a premium to gold.

And as of right now, I’m literally going to look as we’re speaking, the price of platinum to gold is about $350. That is, gold is about $350 more expensive than platinum, and that’s the highest it’s ever been in history. Platinum’s $978 and gold is $1326. So it’s, yeah, it’s right at $348 an ounce. I personally believe every time it’s gone above 340, it’s turned around. So I think you could see a fairly rapid move. The ratio, the dollar difference between gold and platinum is about to change. Gold will get cheaper relative to platinum. And when you’re in that kind of a spread, you don’t care which direction prices move, whether they go up or down. You only care that the price difference between the two.

You were talking about silver. When I wrote the book, the ratio was 84:1 and I recommended that as a trade, you buy silver because it’s the cheap commodity and you sell gold because it’s the expensive commodity. Silver is still very cheap relative to gold as is oil. You could get into a platinum-palladium spread, you could get into a silver-gold spread, you could get into a platinum-gold spread, and all of those are near extremes.

Maurice Jackson:

Very interesting perspective here. You know, since our last interview, rhodium has moved up from $950 to $1050. Do you see this trend continuing as well?

Bob Moriarty:

Yes. Rhodium is like silver. There’s a certain component of voodoo to it. Rhodium got up to about $10,000 an ounce in early 2008, and that wasn’t a particularly rational move. But a lot of times rhodium has a premium to not only palladium but platinum and sometimes gold. Rhodium could move from $1,000 to $2,500-3,000, and because it’s off the radar still for most investors, they don’t take the opportunity to invest,. You can actually buy rhodium bars now Baird  produces them and it makes them a lot more liquid than it would have been before.

Maurice Jackson:

You know, you and I were talking in Japan regarding rhodium and how it follows platinum-palladium, which follows gold and silver. And the price of rhodium was $10,000 recently was it not?

Bob Moriarty:

Yes, it was 10,000 in early 2008.

Maurice Jackson:
So for our listeners here, we’re looking at nine years ago, we have a 90% drop, in essence, for rhodium. So this is a unique value opportunity here. Bob, for someone new to your work, can you share why you buy precious metals and what you’re buying right now?

Bob Moriarty:
Well, let me think. I’m actually not buying anything now. I tend to be fairly good at finding turning points. I was buying silver at $15.64, and I was buying platinum at $896. I don’t sell unless there’s an opportunity to put it into something better. And the reason I invest in precious metals is because the world awash in debt. We have the lowest interest rates that we’ve had in 5,000 years. The interest rates are simply not sustainable. There are enormous forces beneath the surface financially, and when it crashes it’s going to crash and take the pseudocurrencies and paper instruments with it. When I buy, it’s an insurance policy.

Maurice Jackson:
And this goes back to part of the discussion we were just having earlier in reference to all these events that are taking place that are not really known to us, and then you have the hurricane. So, and you’re referring to insurance as well to that, so this is a great reason for our listeners to have, again, precious metals as part of your portfolio. For our listeners, if you wish to purchase precious metals and precious metals IRAs, and offshore storage accounts, please visit our website, which is www.ProvenAndProbable.com. Now Bob, before we close today, can you provide us with three …

Bob Moriarty:
Hang on just a minute. There’s something that I should mention, and we’ve mentioned both sides without connecting the two. I’m gonna ask you a question Maurice, and I want you to think about it and give me an honest answer.

A Category 10 hits Miami and wipes Miami out. And Miami has a total value of, say, a trillion dollars in residential property. And you own a home there and it’s insured for half a million dollars. You’re smart enough to go to North Carolina where it’s safe, and you miss the hurricane and your family’s safe, and your cat’s safe. And you go back to Florida, take a look at where your house used to be, you put a claim in for your insurance company, and they send you a letter. What is the check for? How much did they pay you of your $500,000 house?

Maurice Jackson:
Well they’re not gonna redeem you for the full amount.

Bob Moriarty:
Well, no, you’ve got it insured for $500,000, how much is the check for?

Maurice Jackson:
Well, using simple math here, then $500,000.

Bob Moriarty:
No, the check, it’s for zero.

Maurice Jackson:
And expand on that for our audience please.

Bob Moriarty:
Okay. How many insurance companies in the world, in total, can insure a trillion dollar risk?

Maurice Jackson:
They can’t. And that’s including the FDIC, as well, for our listeners.

Bob Moriarty:
Yes, okay. What I’ve just shown you is that there are two risks. One of the risks is hurricane Irma, and that’s what we tend to focus on. The other risk is counterparty risk, and that’s what we ignore. When you have $600 trillion worth of derivatives in the world, the risk is not gold and silver going up or down, it’s not the dollar going up and down, it’s not interest rates going up and down, it’s not CBS or CBOs, it’s counterparty risk.

Now, AIG in London, I think, was on the hook for a hundred billion dollars or several hundred billion dollars, and AIG should’ve gone bankrupt in 2008. And the government bailed them out. But the debt in the world today is substantially higher than it was then. I insure myself financially by owning gold, and silver, and platinum, and palladium, and rhodium as an insurance policy, and I actually have it where I can touch it, feel it, look at it, and know that it’s mine. There are big risks in the S&P, but you could go out and buy a million dollars worth of puts in the S&P, and when the S&P goes to 500, you might learn the danger of derivatives, and the real danger of derivatives in counterparty risk. And you could own all those puts and they could still be valuable, and that’s what nobody talks about, nobody thinks about, but it’s a very real risk.

Maurice Jackson:
That is priceless information. Bob, I recently, just to slightly digress here, I had a conversation with a gentleman who owned GLD and he actually was under the impression that he could redeem and get gold for it whenever he wanted to, and those are some of the sophisms that are out there today, so thank you for addressing that.

Now before we close today, can you provide us with three issuers that have your attention at the moment?

Bob Moriarty:
Okay, hang on. Let me bring it up. One that I’ll mention, and it’s something that I’ve written about in the past and people can go and look at it and see what I’ve said, is a oil company called Molori. The symbol is Mike, Oscar, Lima (MOL). They’ve got about 32 million in shares outstanding. They are drilling in north Texas for a well that could be 50-100 barrels a day, and each barrel a day is worth about $50-60,000. They’re in a JV, they’ve got about 25% of the JV. The well is being drilled right now, it will be completed and the results released by the end of the month. It costs them about $300,000 per well, but at 100 barrels a day, that means they had 25 barrels and you multiply 25 times 60,000 and you come up with $1.5 million dollars in value that could be added per well. And they’ve got space for 600 wells. It’s one of the most interesting energy companies I’m aware of. I’ve got a big position in the company. They’re actually two months late on drilling. They’re working on picking up additional land and it’s certainly cheap now, and it could be expensive very soon.

Maurice Jackson:
Now Bob, where are they trading? Are they on the TSX?

Bob Moriarty:
They are on the TSX. That’s the, Mike-Oscar-Lima (MOL)  OTC MOLOF. And obviously, I mean, we can’t possibly not talk about Novo because you and I have spent so much time talking about it. Novo is $4.85 today. It’s been down as low as 388, $3.88. Well, actually, $3.80, three or four days ago. Novo is acting very strong for a stock that essentially went from .80 cents to $6 bucks to only correct in a small way.  At $4 dollars is pretty cheap. That stock’s very strong, Quinton Hennigh is back charging away in Australia. Eric Sprott went to see it this last week. He has become a big investor on an individual basis. Kirkland Lake did a 14 million share placement. They’re fully funded, they could go into production with the money they’ve got on hand. Novo’s been my biggest holding for at least 5 years, and I think they’ve hit a home run out of the park. It’s cheap now, and it’s gonna get expensive fairly soon.

Maurice Jackson:
And do you have one more for us?

Bob Moriarty:
I’ll give you kind of a throw-away. Silver is cheap relative to gold. Silver is the most emotional metal out there. Silver bugs are totally goofy, I mean, they just, they’ll chase anything silver. They get whacked on a real regular basis because the guys writing about silver are pretty much all frauds except for David Morgan. Silver is not particularly rare. It’s cheap relative to gold now, and that’s why you should own it but the company run by a friend of mine named Greg Johnson, Metallic Minerals, the symbol is Mike-Mike-Golf (MMG) and it’s on the Venture exchange, is up in Keno Hill and they have very high grades up there. It’s multi-kilo per ton and he’s financed and I think he’ll do very well up there. So if you want a silver stock that no one’s pretty much heard of, Metallic Minerals is quite interesting. And, again, I own shares in it.

Maurice Jackson:
Well Bob, on behalf of all of us, thank you, thank you, thank you. Now last question. What did I forget to ask?

Bob Moriarty:
What is the chance of us going to war with North Korea?

Maurice Jackson:
And what are the chances sir?

Bob Moriarty:
Zero.

Maurice Jackson:
It’s zero because …

Bob Moriarty:
Because North Korea’s nuclear is armed . The United States does not attack countries that can defend themselves. That fat little 33 year old toad that runs the country is nuclear armed, and he’s safe for exactly that reason.

Maurice Jackson:
Well, and in references to that, I recently conducted an interview with Jayant Bhandari in reference to China and India. What are your thoughts there?

Bob Moriarty:
China and India in what terms? How do you mean?

Maurice Jackson:
The prospect of a potential war.

Bob Moriarty:
There has always historically been conflict between China and India, and that goes back literally thousands of years. The reason for it is, for 18 of the last 20 centuries, China and India have been the leading economic powers on Earth. Now, obviously India is nuclear armed. There’s probably more of a risk between India and Pakistan there is between India and China. India’s led by rational people and China’s led by rational people, and rational people do not throw nukes at each other.

Maurice Jackson:
And before we close here with the discussion of war, how about Syria? We haven’t discussed Syria for a couple of months here.

Bob Moriarty:
I am very proud to see that Trump finally recognized that the United States funding terrorists in Syria was a really, really stupid idea, and he stopped doing that. We paid billions of dollars for armaments, gave them to what was in essence terrorists, they handed it over to the most radical Muslim extremists, and those weapons ended up being used against the democratically-elected government. Syria.

I’m an equal-opportunity anarchists, I despise all governments equally, so I don’t care if Assad is a monster, we’ve got monsters running our country. Big deal. They get their monsters, we got our monsters.

Maurice Jackson:
Very well said. Bob, if somebody listening wants to get more information on your work, please share the contact details.

Bob Moriarty:
321Gold.com. You should go too at 321energy.com. It’s free, anybody can go.

Maurice Jackson:
And also, we referenced your books Nobody Knows Anything and The Art of Peace. Where can we get a copy?

Bob Moriarty:
You can get it anywhere. You can go to your local bookstore, you can order them, they can get it through Ingram. You can go to Apple and order through the iTunes Store. You can go to Amazon and order it through Amazon. Nobody Knows Anything has actually been a bestseller in its category. The Art of Peace is one of those interesting books. It’s kind of like wine and fine women. It improves with age. If you read the book and see the conclusions that I came up with two years ago, you’ll say, “Hey this is kinda weird, this guy actually got it.” Much of what’s happening in the world today was predicted in The Art of Peace. And obviously you and I have spent a lot of time talking, I had two years combat in Vietnam, and the guys who have been at combat are the most anti-war people you’ll ever meet because they’ve seen what war does to people.

Maurice Jackson:
For our listeners as well, we have a dedicated link under the education tab to purchase your copy of Nobody Knows Anything. Bob before we leave also, last question here, I have to ask you. You referenced a book that you were writing, can you give us the status on that?

Bob Moriarty:
Oh, I feel so guilty. That’s on my bucket list Maurice. I mean, I fully intend to, I’ve got the thing organized in my mind already, I know exactly what I’m going to say, I’m just too lazy to type it out. I’ve got to do the definitive book on Novo first. They absolutely, I believe, have the potential for being the biggest gold deposit in history. Should that end up being true, people are going to want to know the history. And I was actually associated … I found out about Novo and the Pilbara basin exactly nine years ago. Quint Hennigh and I were driving up to Wyoming to take a look at a gold deposit up there called Rattlesnake, and we were talking about it. I went over to Australia with Quentin in 2009 which is before Novo was even started. I was the only newsletter writer to ever visit the property, I was there four times before Brent Cook came. He and I were there a month ago. So I know everything that happened with Novo, I know everything about that deposit except what Quinton doesn’t know; and that’s where’d the gold come from, how’d it get in the condition it’s in. It’s the most unusual gold deposit I’ve ever seen or heard about, and people are going to be arguing about it for 50 years, and in six months to a year we’ll know if in fact it’s the biggest gold deposit ever discovered in history. But Quentin Hennigh  a very bright guy and he staked over 10,000 square kilometers, or over 4,000 square miles, and he did that for a reason.

Maurice Jackson:
For our listeners, I want to just commit to you that I will remind Bob continuously to keep us updated on the latest developments of both books.

And last but not least, please visit our website www.ProvenAndProbable.com, where we interview the most respected names in the natural resource space You may reach my at [email protected] Bob Moriarty, the founder of 321Gold and 321energy.com, thank you for joining us today on Proven and Probable.

Bob Moriarty:
Thank you Maurice, you had good questions as always.

Maurice Jackson:
Thank you, sir.

Speaker 3:
Thank you for joining us today on Proven and Probable. Remember to like and subscribe for more conversations with the most respected names in the natural resource space. Check out our website at www.ProvenAndProbable.com.

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2 Comments on "Bob Moriarty – Bitcoin to Zero"

  1. Stick to gold and silver. Just like your book you “don’t know anything” about cryptocurrencies.

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