 Exclusive
Interview:
"Underground" Gold Investor
Andrew Mickey, Q1
Publishing
Nov 21, 2009
"We live in a world
that is totally insane. We have one US government agency buying
worthless paper from another US government agency and the public
nods their heads in agreement just as if it makes perfect sense.
"It doesn't make any
sense at all; it's like taking water from one end of a swimming
pool and carrying it down to the other end and believing you
are making a difference."
-Bob Moriarty, Gold
is Getting Frothy
With gold busting through $1100
this month, government deficits / spending / borrowing showing
no signs of slowing down anytime soon, the stock market at unsustainable
highs, it's clear to see investors are finding few places to
turn.
One of the spots they have
found is gold - the ultimate safe haven - as the last bastion
of safety and wealth preservation.
The interest in gold is at
its highest level in decades. But we've discussed the value and
importance of precious metals in the past. Now it's time to maximize
the opportunity in gold.
That's why I'm pleased to tell
you that we've been able to track down Bob Moriarty to get his
views on the economy, gold, and where the best opportunities
in the gold market are.
If you've never heard of Bob,
I can tell you with great confidence he is one of the most well-respected
gold investors and analysts in the world.
For example, convinced gold/silver
were at a bottom in 2001, Bob and his wife Barbara started one
of the first websites devoted to teaching readers what they need
to know about investing in resource stocks. Bob and Barb now
operate two resource sites, 321gold.com and 321energy.com where
up to 100,000 people a day visit.
Knowing what it's like to start
something you know there will be little interest in,
I've got a lot of respect for Bob.
But the thing is, if you've
read Bob's research before, you know he's not the type of guy
to sugar-coat the truth either.
In this exclusive interview,
you'll learn about:
-The two most important reasons
to own gold now (regardless of the price)
-Why the U.S. is on track to
become a third world nation
-Where Bob is putting his money
now
-An oil technology company
that can double its customers oil production
-How the Dow could hit 20,000
-One of the most dangerous
countries on earth for you and your money!
That's just to start. There's
a whole lot more.
Read on below for all the details.
Andrew Mickey
Chief Investment Strategist, Q1 Publishing
Andrew Mickey and Bob Moriarty of
321gold.com
Andrew Mickey: In your view, what's
the top reason to own gold? What would you tell someone who never
even considered buying gold before today?
Bob Moriarty: There are two reasons to buy gold.
First, gold is an insurance
policy against chaos.
We live in a world where the
US Marines are spending $400 a gallon for fuel in Afghanistan
and using $320 million dollars in fuel a day. Merrill Lynch executives
paid themselves 3.6 billion dollars in bonus money just before
the company was taken over after those same executives lose $27
Billion dollars for the firm and had to be taken over. Goldman
Sachs looks to be distributing about $23 billion in bonuses for
the year.
A year ago they were on the
ropes and were only bailed out by US taxpayers. We have privatized
profit and socialized losses in the US.
One day soon the unemployed
and homeless are going to get very angry. When the riots start
and the banks all close, it will be a good time to own gold.
Second, gold is an investment
that has no counterparty risk.
There is $600 trillion in derivatives
bets, all of which have enormous counterparty risk. The world
is a $60 trillion economy. $600 trillion in derivatives is insane.
In 1923 in Germany, a quarter
of an ounce of gold would buy a nice home. It's going to happen
again.
Andrew Mickey:
Over
the short-term, the next few months or a year, do you see any
short-term catalysts for gold?
Do you see
anything like those, or worse?
Bob Moriarty: There is a giant black swan fixing
to land on the pond...
Andrew Mickey: Over the short-term,
the next few months or a year, do you see any short-term catalysts
for gold?
Bob Moriarty: It could be a nuclear war against
Iran, it could be riots in the US as the government tries to
force an untested H1N1 vaccine on armed citizens, it could be
a Court ordering all foreclosures stopped until proof of ownership
is proved, it could be the banks admitting they are all broke,
it could be China foreclosing on the US. We live in interesting
times.
Andrew Mickey: Throughout this rebound,
silver continues to lag behind gold on a relative historical
basis. Do you see a clear reason why this is and whether it will
last?
Bob Moriarty: Gold is money. Silver is a commodity.
As much as the silver bugs believe silver is money, if wishes
were horses, beggars would ride.
When we go to a gold standard,
as we must, then silver will roar. The correct ratio between
silver and gold is probably about 25 to 1.
Andrew Mickey: We know you travel
all over the world, so I wanted to get your opinion on a few
countries which are politically safe for investors.
There are many
which have attracted plenty of foreign investment like Peru and
Chile. But there are also some which the investing public may
be a bit wary of - Russia comes to mind.
So which countries
do you see as safe, which ones are riskiest, and are there any
that investors just perceive the wrong way?
Bob Moriarty: As the US sinks into becoming a third
world nation, there will be an enormous backlash against wealth
in the country. I see exchange and capital controls soon. If
an investor has the ability to get money out of the US, they
had best do it soon. The US is going to be one of the most dangerous
countries on earth.
A Russian predicted in 1995
that the US would break into 6 mini-fiefdoms. He is probably
right. New Zealand and Australia are probably the safest countries
to be living, and it's not just a case of investing safely, it's
a case of living safely.
Chile, Uruguay, Argentina may
be good. Owning a small farm capable of being pretty much self
sufficient could be a real good idea.
Russia and Venezuela have no
tradition of private property rights. South Africa is about to
turn into another Zimbabwe, much of the world is about to step
into the Dark Ages.
Andrew Mickey: I can only imagine
when gold hits $2000 an ounce and companies from "rich"
countries who are developing gold mines in a foreign country
are accused of "stealing" the people's wealth. Sounds
like something politicians will be itching to do in time.
Do you see
an adverse or unexpected consequence of higher gold prices?
Bob Moriarty: We always talk about gold hitting
$1500 or $2000 and wonder what the effect will be.
That's all based on an error
of logic. Gold never changes its value. An ounce of gold was
worth an ounce of gold a year ago and it will still be true a
year from now.
It's the dollar that changes
its value. What we need to ask ourselves is what will be the
effect of the additional $99,000 on debt loaded onto the backs
of American taxpayers in the last year on the dollar.
Will the dollar of 2010 add
6 zeros or 9 zeros or 12 zeros as the Federal Reserve destroys
the financial system of the world? In the not too distant future,
one ounce of gold will buy one unit of the Dow. I don't know
if that's Dow 2000 or Dow 20,000.
Andrew Mickey: Outside of gold and
silver, are there any other sectors you like? Agriculture, global
LNG, uranium, technology, or anywhere else?
Bob Moriarty: Peak oil is real and the only thing
preventing $200 a barrel oil right now is a recession that is
morphing into a depression. Energy of all sorts is good.
Food is an analog of energy
so agriculture is good.
Uranium is the only reasonable
replacement for oil but we have waited for too long to recognize
peak oil and we are going to pay for that error of judgment.
Andrew Mickey: Where are you putting
your money to work in the short term?
Bob Moriarty: Production stories. Gold first, then
silver, then everything else.
Andrew Mickey: If you had to buy
just one or two stocks that you could not sell for at least one
year, what would you buy?
Bob Moriarty: There is an oil recovery company that
makes a field-specific bacteria that breaks down the surface
tension of oil.
It's a private company right
now called Titan Oil Recovery but when it goes public, it's going
to be the hottest thing going.
Canada's Husky Energy presented
a paper in New Orleans about the Titan Process and they maintained
that they paid for the investment to recover more oil in 17 days.
Oil production increases of 100-200% are commonly reported.
[Editor's
Note: Learn more about the Titan Process at:
http://www.titanoilrecovery.com/]
Andrew Mickey: As an outspoken gold
investor, if you were asked to testify before Congress one time,
what would you tell them?
Bob Moriarty: They need to kill the Federal Reserve
before the Federal Reserve kills the country. But it's too late.
***
There you have it - the quick,
dirty, and true analysis about investing in gold and energy from
someone who has been doing it successfully for years.
Again, we think the gold, energy,
and natural resources boom still have a long way to go before
they reach "bubble" territory. And the current and
future uncertainty surrounding all of them will only make the
race for commodities last longer.
But still, there are many considerations
most investors fail to take at this point in the upward cycle.
For instance, when prices start
to get really high, we're going to see unprecedented government
involvement. Whether it's excessive profits taxes, increased
regulation, or outright nationalization of productive resources,
it's going to come in some places. Just wait for gold to hit
$2,000. It happened with oil in the 70's.
That's why it's important,
now more than ever, to look at all the "what ifs" when
devising a natural resource investing strategy.
In the end, the natural resource
boom is still in the middle stages and there is plenty more to
come for those of us who seek out the right opportunities at
the right time.
Andrew Mickey
email:
editor@q1publishing.com
Chief Investment Strategist, Q1
Publishing
321gold Ltd
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