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Armageddon on the Horizon

Bob Moriarty
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November 25, 2004

But not today.

Most of the readers coming to 321gold.com have a pretty good idea of where I stand on the war in Iraq and the coming Armageddon in our financial system. Well, it's coming but a few too many people are too pessimistic on the dollar and that suggests to me that both the dollar and gold are due corrections. Gold has gone up 10 out of the last 11 weeks and that's probably overdoing it. Nothing goes straight up or straight down.

It's probably heresy to suggest gold might ever go down, gold bugs are a loony group. I'd be lot more popular if I were a far more vocal cheerleader under all conditions. But the cheerleaders are popular solely because they tell people what they want to hear rather than what they need to know. And as a result the sheep following them lose a bundle of money on a regular basis. Nobody has all the answers and all any of us are doing is giving our opinion. You will tend to do a lot better if you follow common sense and ignore the crowd. Ignore the cheerleaders as well.

I did some figures on the drop in silver from April 2nd to May 12th or so of this year. The number of outstanding contracts dropped from 125,000 to 75,000 as the price plummeted by $3. It's hard to figure out exactly how much money was transferred from the hands of the silver bulls to the hands of the silver bears but it was in the $10 billion dollar range. Just because some fool comes along and whispers sweet nothings in your ear doesn't mean you have to believe every word. Cheerleaders lose their followers a lot of money.

How many people have actually pointed out that we really aren't in a gold bull market? The rise in gold since 2001 is more a product of the dollar going down than gold going up. There are a whole boat load of commodities other than gold which have gone up far more. In many currencies gold has, at best, been in a sideways trend. That doesn't turn me into a gold bear, I know what is in store for both the US dollar and our economy. Basically, the middle class is going to have their savings wiped out and the standard of living is going down in a big way. There will be rich and there will be poor, there always are: but for middle class American, the future is grim.

Not today though. When too many people know the "facts" they cease to be facts. And too many are too bearish on the dollar.

The real issue is probably going to be the nature of the crash. Lots of people want to believe as Stephen Roach and John Maudlin that we will "muddle through" before the crash. "Muddle through," my butt. Not with $100 trillion dollars in debt world wide and a US government debt of $70 trillion. In my opinion, we're going to have a sudden, surprising to most, catastrophic crash.

The Bush administration guarantees it. This "Gang of Fools" couldn't shoot straight if they had a cannon aimed at their feet. They don't have clue one. For all that is said about Iraq (remember when it was because of WMD and Saddam?) we are spending $1.5 billion dollars to steal $500 million dollars of oil a week. I wouldn't dream of appealing to the sense of morality of the "Gang of Fools," they don't have an ounce of moral sense between them. But spending $80 billion dollars a year to steal $30 billion dollars worth of oil doesn't make a lick of sense. And don't tell me we went to war to rid the world of Saddam. He's in a jail cell. Why are we are war with the Iraqi people? They didn't do anything to us.

Thankfully the war is in the final stages before we declare victory and bring our troops home. You know that when you get to the War Crimes stage, the war is pretty much lost. If any reader has forgotten the picture of the murder of a VC suspect in 1968, you may want to see it again. When you give away the high moral ground in a war, it's all over but the shouting.

Forty years ago this month I was going through Marine Corps Boot Camp in MCRD San Diego. We had a hour long course on the Geneva Convention and why it makes sense to obey the International Law on Warfare. One really good reason to not go
around shooting wounded captives in cold blood is that when you go killing prisoners, your enemy will get the idea that it's perfectly ok with you if he shoots all the wounded prisoners he takes. Obeying the Geneva Convention makes good sense if for no other reason than self defense.

The entire attack on Falluja sounds like something the Nazis would have pulled. We refused to allow males from 15-55 through our lines before the battle (WAR CRIME): we targeted medical facilities (WAR CRIME): we failed to protect civilians (WAR CRIME) and finally some dumb-son-of-a-bitch Marine gets captured on film killing a wounded prisoner. That is not how you win wars, it doesn't take a lick of valor to shoot wounded people in the head. That's how you lose wars.

We are going to be paying for that crime for the next 400 years should we last that long. Which I doubt.

How many people remember this quote? "In the ranks of that regime are men whose idea of courage is to brutalize unarmed prisoners," Bush emphasized to U.S. Central Command troops during a visit to MacDill Air Force Base in Tampa, Fla.

We have nothing to gain in Iraq. We have lost every bit of credibility and this Gang of Fools is spending us into bankruptcy. Remember when Bin Laden came out a week before the election and said he figured that for every dollar he spends, he forces us into spending $1 million. The math is about right.

Bush has taken a $300 billion dollar surplus and turned it into a $600 billion dollar deficit. And got reelected on the basis that you wouldn't want to vote for a liberal, they spend money like drunken sailors. Bush is like a 5 year-old-child on crack with a loaded gun and a Platinum American Express card in a candy store. Osama bin Laden is probably dead, he's been dead for three years now. But he's still winning and the President of the United States is his greatest recruiting agent.

Just because the US has collectively and totally lost its moral and financial compass doesn't mean the rest of the world has. We have turned all the goodwill earned over 230 years into scorn and it will soon metamorphose into loathing. The Chinese, Japanese and Saudis each have the ability to pull the rug right out from underneath the dollar. When they do: and any one of them could do it, [also here] our world will change forever. Shooting prisoners in the head in cold blood is only one way of waging warfare. There are others.

Anytime I write something which even faintly smacks of being anti-Tyrant, two or three clowns crawl out of the woodwork and send me mindless prattle about my being a "Liberal" or "Commie." And how I should be grateful to live in the land of the free and the home of the brave.

Well folks, brave people put their lives on the line for their country doing their job day after day in a combat zone. Brave people do not murder. I know, I served for 20 months in Vietnam with some very brave people. Some of them were Americans. Some weren't.

I cannot fault those in Iraq who defend their country against tyranny. I only wish a few more Americans would defend their country.

Note: When most of you read this I will be in San Francisco for the gold show.

I'll be back on Wed Dec 1st, so kindly refrain from emailing me until Tues. night, Nov 30th.

November 24, 2004
Bob Moriarty
President: 321gold Inc
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