Bob Moriarty the founder of 321gold and 321energy sits down with Maurice Jackson of Proven and Probable to discuss some very, very important topics affecting everyone. Bob addresses his concerns with the bifurcation between Candidate Trump and President Trump as he discusses the recent bombings on Syria and Afghanistan and the potential threat of war with North Korea and or Russia. Mr. Moriarty, discusses the big elephant in the room which is the U.S. Debt/Bond Market and the resolve, or lack thereof, for the government to create a solution. Bob shares with listeners the merits on stewardship of precious metals and which metals he is procuring at the moment and why. Listeners will also discover some truly spectacular junior mining companies that have offer a unique value proposition for investors.
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Maurice: Welcome to Proven & Probable where we focus on Metals, Mining and More. I’m your host, Maurice Jackson. Joining us today is the founder of 321gold and 321energy.com and the author of two of my personal favorite books, The Art of Peace and Nobody Knows Anything. Bob Moriarty, thank you for joining us, sir.
Bob: Sure. It’s a pleasure to be here.
Maurice: You know, when it comes to putting a succinct picture together on the relationship with politics, geopolitics, and the value proposition it presents in the natural resource space, speculators turn to Bob Moriarty.
Bob, President Trump famously stated in 2017 that the United States is not the world’s police force, and within 45 days, bombs Syria and Afghanistan. What are the short-term and most important long-term implications regarding these actions?
Bob: Well, what’s scary about that is there are two Trumps. There was Candidate Trump who said 45 times that attacking Syria would be a mistake and the essence of his argument was it could lead to war with Iran, with Syria, with Russia and China and that would be a very foolish thing to do. Now, I would say categorically the chemical attack blamed on Al-Assad was a false flag operation. The Russians and the Syrians notified the Americans 24 hours in advance that there would be an attack on the ISIS weapons storage area. There was an attack, but it was by conventional weapons and those conventional weapons set off chemical weapons that ISIS was storing.
Now the US has known that right from the get-go, but Candidate Trump was against attacking Syria, but President Trump has flip-flopped. He was looking for an excuse. The CIA, the Deep State gave him that excuse and he fired 59 missiles at Syria. Now according to the US, 58 of them hit the airfield. According to the Russians, 23 hit the airfield. I’m more inclined to believe the Russians and Americans and it was a military as an ex-military pilot. I can tell you it was kind of a useless attack. One B-52 carries more ordinates that we fired at that airfield and we destroyed about a million dollars’ worth of Syrian airplanes and it costs us somewhere between 60 and 100 million dollars to do it.
Wars cost money. And it’s absurd to spend 100 million dollars to do 1 million dollars’ damage to your enemy. It was a foolish attack that served no purpose whatsoever. And if you think about it, as soon as you attack the legal government of Syria, you become a card-carrying member of ISIS. So, we claim to be fighting ISIS on one hand and now we’re definitely fighting Al-Assad. It’s pretty crazy.
Maurice: It truly is. If I’m going to play devil’s advocate here from me, I’ve noticed that prior to the bombing that there was this—the mainstream media was always mixing this relationship with Putin and Trump. As soon as that occurred, you no longer hear that relationship being discussed really. Did you know some correlation there?
Bob: Well, yeah. Here’s what’s interesting. Candidate Trump was all in favor of being nice to Russia and getting along. You can call Russia the second most powerful nation on Earth. Maybe it’s China, maybe it’s Russia. I don’t know. Russia has not attacked the United States. They’re not the enemy of the United States. I don’t want to see a war with Russia. It would be an extremely foolish thing to do. And I fully approved of Candidate Trump being in favor of improving the relations with Russia.
As soon as he took office, the fake-stream media just attacked him on every front and everything that could be blamed on the Russians including snowstorms in New York was blamed on the Russians. But if you think about it, the Russians haven’t done anything to anybody. Now why all of a sudden are they the enemy? There is a coup d’état that is taking place. I believe they have pre-empted Trump and they’ve turned him. So, what Candidate Trump stood for is the antithesis of what President Trump is doing and some things like dropping the mother of all bombs in Afghanistan. That’s the most useless thing I’ve ever seen. We spent about 15 million dollars to drop one bomb on a cave complex that we built. We’re doing things that are pretty close to insane.
Maurice: Well, my understanding is—and what I’m hearing in the news again, mainstream media, different sources, of course—is that this is being done in a way to get North Korea’s attention that this guy is not playing. But, I don’t believe North Korea (a) is intimidated and (b) I think they have more of an ability to actually defend themselves and react in a way that we may not be ready for. What are your thoughts on North Korea?
Bob: Yeah. That is absolutely correct. Everybody forgets that Seoul, Korea, the capital of South Korea, is only 35 miles from the DMC. The North Koreans could flatten Seoul, Korea, in a day. OK. They have the weapons, conventional weapons, nevertheless, but they have the weapons to be able to destroy Seoul. We are playing with fire there. I will state it categorically for anybody listening. If anybody fires a shot whether it’s the North Koreans, whether it’s the United States, whether it’s the South Koreans, whether it’s Japan, whether it’s China, if anybody fires a shot, it will go nuclear. They war gamed it a number of times and every single time it went nuclear.
Now, quite bluntly, I think the guy running North Korea is a fruitcake. I wish that his people would overthrow him, but they are nuclear armed and the only way you could sort this out without millions of people dying is to drag him kicking and screaming to a conference table.
Maurice: Absolutely. Switching gears, let’s talk about the United States here. You know, now that we have a better feel for the Trump administration and Congress, what have we learned about the resolve to address our national debt?
Bob: We have learned absolutely categorically nothing. Trump came in and said, “I’m going to balance the budget. I’m going to rebuild America. I’m going to make America great.” Promptly hands the military another 54 billion dollars that they don’t need and the military is going after him for more. We are broke. There is no solution to it. There is simply nothing you can do other than to declare bankruptcy.
Maurice: You know, I’m just thinking about the attacks on Syria when you referenced the damage that we conducted and how much it costs us, and that to me might be a clear indication of how Congress is going to run or address our national debt. You know, in the past—
Bob: OK. They’re not going to do it all. I mean the really interesting issue, I think the 29 the the 19th very soon. We’re going to run out of cash. We need to do something to increase the spending limits. Congress spends money to gain votes. The reason Raytheon got away with the F-35 program because they had programs, they had companies and I think 385 congressional districts—that’s out of 435 congressional districts total—they literally bought off every congressman. The F-35 is the most useless airplane the United States has ever built. It bankrupted the Pentagon. It will never see combat. It’s a dreadful, dreadful airplane that simply doesn’t work. And the idea that Congress or the White House is going to become responsible, I just don’t see that happening.
Maurice: Bob, sticking with the national debt. You know, you’ve voiced your concerns in previous interviews regarding the bond market which is, of course, germane to debt. What is the bond market telling us?
Bob: Well, if you have ever emptied the powder from shotgun shells—we did this when I was a kid. We used to make little—we make guns out of the spokes from bicycles. You take a shotgun shell. You cut it in half. You had to take the gunpowder out. You take a spoke and the nut from a bicycle and you jam it full of powder and then you put pellet in the tube and then you hold it over a match, and you effectively have made a gun. You’d probably go to jail if you did that today, but that’s what we did 50 and 60 years ago.
And if you can imagine a pile of gunpowder the size of a football stadium, you could step on a rock and blow the city right out of existence, OK? It’s not the fact that the bond market is foolish. The bond market is so big and it’s so germane to everything in our financial system. The idea of selling 30-year bonds and—the Europeans I think are going to 50- and 100-year bonds. Interest rates have always been the rent that you charge people for loaning money and interest rates are made up of the rent plus inflation. Now inflation has been higher than bonds for years and years and years. So if you loan the government money, they guarantee they’re going to pay you back less. And what they don’t tell you is not only are we going to pay you less money than you gave us, we may not pay you at all. The bond market is going to blow up one of these days. We’ve been on the head of a needle for years and all it’s going to take is one black swan event for all systems to blow sky high.
Maurice: I thought about it a number of times. You know, I’m a grandfather myself. It’s a concern I have and it really bothers me and I’m glad that I through, you know, learning from your work, I’ve made a transition into precious metals instead of bonds to offset this burden on myself and, of course, for my children and my grandchildren. Let’s talk about what are your thoughts on the Fed raising rates.
Bob: They’re going to. They have to. The Fed does not have the control of the interest rates to the degree people would like to believe. They do. The Fed does act—the Fed reacts and they’ve stated and I wholly believe that they will increase rates another 2 or 3 times each year. They have to. The interest rates that we’ve had for the last 8 years are irrational. They punish savers and all businesses are built from savings. When you destroy savers, you destroy the middle class and that’s a very foolish thing to do.
Every society has rich people and every society has poor people, and the stability of the society is based on size of the middle class. When you have a large prosperous middle class, you have a large prosperous country. When you have no middle class, you have a third-world country. We are turning United States into a third-world country and it’s going to happen far faster than anyone recognizes.
Maurice: It’s been pernicious over the years, but I can see it moving exponentially. Let me ask you this, Bob. Do you foresee another QE on the horizon?
Bob: I could but I think the danger now is not the financial disruption. The danger is a black swan. It could be Syria. It could be Russia. It could be South China Sea. It could be North Korea. We’re doing so many foolish things and the Chinese are sending a message to us and the Russians are sending a message to us. Syrians are sending a message to us and that is stop doing what you’re doing. I read something that came from the Russian foreign minister in the last couple of days and he said, “Russia will never fight another war on their land.”
And when the Russian foreign minister said that, what he meant was if it looks like there’s going to be a war, we’ll start it but we’d do it on your ground. Now, Americans feel that we can bomb the crap out of Afghanistan and we can bomb the crap out of Iraq and we can bomb the crap out of Libya and we can bomb the crap out of Syrians, and we’ve bombed Somali and we can bomb Sudan, but nobody is ever going to attack us. What if we’re wrong?
Maurice: That’s a very good point. What if we are wrong? And the question then becomes is how prepared are you? And that leads to more questions, of course, but—
Bob: I can tell you right now, 99% of Americans are not prepared for anything. The hurricane a few years ago, Hurricane Katrina, proved the United States is 3 meals from disaster at any given time.
Maurice: It’s frustrating and it’s sad to hear that these things are coming to fruition. You know, one item of concern to me that we haven’t discussed with regards to interest rates being increased is the velocity of the currency I believe will pick up. And if that does occur, that could be disastrous in rates in terms of inflation.
Bob: Yeah. I mean we’re seeing an inflation right now and we’re seeing zero growth. We’re in a recession and nobody wants to admit that we’re and obsession right now. Now, I’m looking as we speak at the value of the US dollar index and it’s down 0.8% today. Now, that is a—I think it’s a 6.3 trillion dollar a day market. So, 1% is 63 billion dollars. So, the value of currency market overall has changed about 45 billion dollars in the last 24 hours. One of these days, it’s going to blow sky high.
Maurice: What are some of the solutions to fix our national debt in this growing tax burden that’s, you know, on the rise? Because contrary to what most people believe, taxes not your home are your largest expense in life.
Bob: I’m not sure that’s true. I think it’s actually healthcare.
Maurice: Well, that too. But you’re correct. We have healthcare and we have taxes because everything that you’ve ever purchased, you’ve had to pay taxes on. But—and that comes from again all the spending that we’re doing in not addressing the national debt. What are some solutions that you think we should implement?
Bob: Yeah. Here’s key and you’ve hit on something that’s very important. You’re very close to a major discovery. It is not actually the amount of money that a government collects that’s significant. We call that taxes and we think that the difference between what the government collects in taxes and what they spend is meaningless. Well, actually, any money the government spends, they have to collect somehow and they can collect it 3 ways. They collect it either in taxes. They collect in an inflation or they collect it by default, OK, going bankrupt.
Now, you ask the question of what kind of solution is there and my answer is absolutely candid. Know this, I’m 100% certain there is no solution. You cannot be as bankrupt as the United States is today and that’s about morally and fiscally. You cannot be as bankrupt as we are without starting all over again. We have 20 trillion dollars in funded debt and more importantly we’ve got somewhere between 100 and 200 trillion dollars in unfunded debt.
Now, I’m going to ask you a little bit of a trick question. I want you to think about it. Let’s assume the attack on the Syrian airbase caused 60 million dollars. Who’s going to pay for that?
Maurice: Well, the citizens are supposed to pay for it.
Bob: Well, how are they paying for it? They’re certainly not paying for it in taxes.
Maurice: So, in this regard, is inflation through the currency (a) or taxes (b)?
Bob: That’s—the inflation that we’re going through right now is covering our current expenses. It’s covering our expenses for the past years. Strange enough, that as a grandparent, you should be concerned because you’re not paying for it. United States government has borrowed the money from Chinese and it’s actually your grandchildren and their children who are going to pay for it. And when that child is born in the United States today, it is a quarter of a million dollars in debt and it’s going to pay that either in taxes or reduce standard of living. The debt of the United States owes means that either your kids work as slaves, your kids and your grandkids work as slaves for the government, or they have a reduced standard of living or both.
Maurice: Now, let’s see what investors or speculators listening today can do to offset this if at all possible. Bob, what prudent actions should speculators in mining stocks and physical precious metals take?
Bob: Well, here is what’s funny. Speculators are people who buy the nifty 50s. Speculators are people who buy Google. Speculators are people who put their money in a bank. If you buy resources, you’re no longer a speculator. You’re the most conservative investor you could possibly be. And the key here is not you’re investing for profit, OK? And nobody wants to hear that. That would mean nobody else is going to say that. Nobody would dare say it. What you’re trying to do is preserve the value of the money that you do have. Gold could get cut in half and that could be a good thing if you bought gold because the alternative is you could have your money in the bank and it could be cut by 90% or you could have your money in Google and that could be cut by 90% or you could have your money in bonds and it could be cut by 75%. It’s more important to preserve capital now than it is to focus on making money. Preservation, survival is victory.
Maurice: Very, very well said. You know, Bob, your site is 321gold.com and 321energy.com respectively. You provide very comprehensive insights on junior mining companies that offer truly amazing value propositions. Which ones have your attention at the moment?
Bob: Let me look. That’s a good question. I believe and I stated a couple of days ago or I stated yesterday, I think we’re going to have a correction in gold and silver starting now and going through June or July. Typically, we have 2 low points a year—one in June, the end of June, and one in the end of December. I think that will be true this year. I think the next 6 weeks will give a good opportunity to buy some pretty nice stocks cheap. Now, one stock that I happen to like in commodity is graphite and we just had a new advertising call me a week ago. The company is DNI. It’s on the C Exchange. And they’ve got what should be the lowest cost graphite property in the world. It’s in the Saprolite. It’s in Madagascar. They’ve got a partner who’s going to fund it to a PDA and that partner is in for 50%. DNI is in for 50%. And it probably costs 10 to 12 million dollars to get it into production. When you talk about lithium ion batteries, that’s a misnomer because there’s 10 to 20 times as much graphite in lithium batteries as there is lithium. So maybe we should call on graphite batteries with a little bit of lithium.
But, there are some pretty cheap stocks there. I like buying stocks when they’re cheap. Another lithium company is—the symbol is XMG. The company is MGX Minerals. The stock went from 90 cents to $2.75 in a week. They announced a placement. It’s back down to about $1.08 right now. I was in the stock at $1.05 and was thrilled to do it. And I would certainly be willing to buy some more shares if it came back down. A company that I think I’ve mentioned in the past before is Irving Resources. The symbol is IRV. They’ve picked up a number of projects, very high-grade $23,000 to $25,000 a ton samples. The highest grade gold mine in the world is in Japan. It’s called Hishikari. They hand-sort the ore from that deposit and they use it as flux. Japan is literally the last frontier for gold mining.
But there’s a lot of good stocks out there right now. I’d like corrections. That’s a horrible thing to say because everybody wants to see prices go up. But if you like something at 50 cents and it goes 25 cents, you can buy twice as much of it. And I think there’s a lot of good value now. I’m not at all concerned by saying I think gold and silver go down. I think that’s a good thing.
Maurice: Well, we all enjoy value propositions. And again, thank you for sharing that with us. Finally, precious metals. Why should listeners own them and which ones are you buying right now?
Bob: Good question. You should own it because you want to have access on real money that you can put on your hands on. Should the financial system collapse, which I believe is imminently possible and imminently soon, imminent. You want to have access to something that everybody accepts as money. Now whether you’ve got platinum or whether you’ve got silver or whether you’ve got gold, those don’t make any difference. You want to have something of real value.
Now, in terms of history, gold is actually expensive at $1,290. You can go back almost any period 5 years, 10 years, 20 years and gold at $1,290 is expensive. That said, the relationship between gold and silver, silver is cheap relative to gold. The ratio right now as we speak is 70-1/2 ounces of silver per ounce of gold. And the ratio , not the ratio, the price difference between platinum and gold is about $315. If you can ever short gold above $325 premium platinum, platinum is a more valuable metal. It takes a year to process. It costs more money to buy. There are far fewer sources and it’s a commercial metal. For it to have at $325 or $315 discount to gold is—it’s only happened about 1% of the time in the last 300 years. So, platinum is very cheap relative to gold. Silvers are cheap relative to gold and I would own 1, 2 or 3 of them.
Maurice: Well, your thesis coincides with my thesis. I’m more in favor of the white metals although I’m strong advocating for having all four. But silver, platinum, palladium really resonate with me. Bob, last question, what did I forget to ask?
Bob: You didn’t ask me how my radishes are.
Maurice: Well, I was going to get to that. Tell us about it.
Bob: I’ve been sitting here waiting for you to ask. We put in a garden this year and radishes are great because you just kind of throw them on the ground and then they sprout. We’ve been eating radishes for the last week.
Maurice: Well, that’s great to hear. I enjoy radishes myself.
Bob: Well, not a good thing. It’s a bad thing. You really get tired of radishes 3 times a day.
Maurice: Well, I’m sure you do and your tongue kind of burns after a while.
Bob: You bet.
Maurice: Bob, before we close, we referenced your books, The Art of Peace and Nobody Knows Anything. Ladies and gentlemen, these are must-have books for your library. Bob, give us a brief narrative and where we can buy a copy.
Bob: Well, that’s a really interesting question. I’m glad you brought that up. I wrote The Art of Peace in 3 weeks in November of 2015, and it’s actually 2 books in 1. It’s a story of my 6 years in the Marine Corp. I was a fighter pilot and a combat pilot in Vietnam for 2 years. But intertwined with that is reflections on both Vietnam War and the wars that we’ve been undergoing since then. The United States has started 82% of the wars in the world since 1945 and we have lost every single war. In no war have we been better off at the end of the war than we were before the war started. We’ve created 65 million refugees in the world and that’s creating a disaster for Europe and it’s created a terrible humanitarian problem.
The interesting thing is that good writing is like fine wine. It improves with age. And the longer after something is written that you read it and still get value out of it, the better the read. Mark Twain would be a perfect example. I read Mark Twain 60 years ago and it’s just as timely today as it was then. The Art of Peace is worth reading the last chapter because I predicted many of the things that have happened including the assent of both Sanders and Trump and some reflections on what happens when a country goes into a permanent state of warfare. And basically, you’re either defeated militarily or you bankrupt yourself. It happened to the Spanish. It happened to the Dutch and it happened to the French. It happened to the English. It happened to the Russians. And we act like it’s not going to happen to us. Well, it’s going to. We either get bankrupted or we get defeated militarily. Either one of which is a bad thing to do. The other book, the—
Maurice: Well, before you go any further from me, Bob, did you forward a copy to President Trump, The Art of Peace?
Bob: I’m not sure that he reads anything.
Maurice: I had to throw that in there. You left it open there.
Bob: I made the comment several times that Trump would either be the best president in US history or the worst, and I think the juries in and I think it’s bad news. I loved what Candidate Trump said. I hate what President Trump is doing. But The Art of Peace is a good book. Any book about war written by somebody who participated is always going to be anti-war. There is nothing good that you could say about war. It is not the best solution ever. It is always the worst solution. And when you read a book about war by somebody who was there or somebody who flew hundreds and hundreds and hundreds of hours at combat, you realize you’re getting the truth. You’re not getting some deep state mumbo-jumbo hurray for war. Let’s wave the flag.
The other book is Nobody Knows Anything and it’s kind of a primer on what you need to know to invest and I tell people some things that nobody else would ever dare tell them. And, you know, some of it is everybody’s got an agenda and when you listen to somebody, you need to think, “Hey, what’s this guy’s agenda? Is he trying to make money from me? Or is he trying to make money for him?” Another issue is newsletter writers and websites where people prognosticate. We go to the ones that tell us the lies that we want to hear. Now, nobody would ever go for an honest politician and the most popular newsletter writer is going to be the guy who feeds fantasies of his readers the most.
And there’s certain basic truisms in the book that people should know, but they never been taught. Andone is nobody ever went broke taking a profit. With the junior mining spectrum especially, you have a range of 200% to 300% gainers and I am more than willing to sell and take a profit. If you don’t take a profit you’re going to take a loss.
Maurice: It sounds simple, but how many people actually apply that? You have to ask yourself the question if you’re the listener.
Bob: Well what’s funny it is simple. Don’t complicate it. Keep it simple. If you keep it simple it works.
Maurice: Bob, where can we get these books?
Bob: You get them in two different places. You can go to Amazon and order either book there, or go to your local bookstore and go in say you want buy these books by Robert Moriarty and they can order the books for you.
Maurice: Last but not least, please visit our website www.provenandprobable.com. Through Miles Franklin Precious Metals Investments We offer Gold, Silver, Platinum, and Palladium, Offshore Storage, Precious Metals IRA’s, and Safe Deposit Boxes which are fully insured and secured by Brinks. The website again is www.provenandprobable.com , you may reach us at [email protected].
Bob Moriarty, of 321gold and 321energy, thank you for joining us on Proven & Probable.
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