Panic "Default of 2008" - Bob M - TNRBob Moriarty
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Oct 21, 2008
"Thetwo companies I saw a week ago not only have real business models, eachis selling for less than the cash they have in the bank. At this point,they are worth more dead than alive. That's no risk at all."
Peoplewho have been following this site know that I have been predicting adepression for years. It's here. Even the dolts in Washington arestarting to figure it out. The credit system has ground to a halt.Commerce is on the verge of a complete breakdown. 18 hours after thebank holiday starts, the riots begin.
Physicalgold and silver are insurance policies against financial chaos. We havefinancial chaos. You can still buy an insurance policy and that's thegreatest deal in investment history. You think governments printing of$7 trillion dollars of kerosene dumped on a financial holocaust won'thave an effect? It will.
TheUnited States dollar is going to default soon. We have known since late2002 that the US was in deep trouble. Treasure Secretary Paul O'Neillrevealed the United States Government had a real debt of $44 trillionand it was growing at a rate of $2-$4 trillion per year. As of lastyear the debt was up to $59.1 trillion.
Evenbefore the government started throwing money around like a drunkensailor US spending was totally out of control. In the fiscal year endedSeptember 30, 2008, the actual yearly deficit totaled $1.017 trillion.We are broke and anyone who passed Economics 101 has figured that out.Soon, very soon, the US will officially default on their obligations.
I'vemade mention many times the incredible figure of $596 trillion dollarsworth of derivatives. The world economy is only $60 trillion dollars.It's a giant crap game where everyone is playing with Monopoly money.Everyone believes that when the music stops, they will find a chair.But there are no chairs. The number of nearly $600 trillion is so largethat it has to be fraud.
Derivatives have doubled in two years. How?The world economy hasn't doubled in two years.
Soonthere will be a mad rush into "things." There is no choice. You can buyTBills and frame them so you can mount them on your wall. Then you canpoint to them when your grandkids come over and say, "See that? Thatused to be considered money." TBills are toast.
FannieMae? Forget it, they are bankrupt. The greedy dullards in Washingtonthink they can actually do a better job of running Fannie Mae than thegreedy dunderheads who used to run it for a profit? Are you kidding?
SwissFrancs? I doubt it. They are about to go the way of Iceland. Actuallythe Swiss government is deeper in debt than Iceland was.
"Things!"You need to be in "things" else your assets are going to be poured downa black hole. I am even coming to the point of view that gold andsilver ETFs have joined the "Useless as teats on a boar pig" category.The risk is no longer market risk or even "Do they have the gold risk?"The risk in everything today is counterparty risk. That's why bankswouldn't dream of trusting each other. They do have a point. They havelooked in their own cupboards and found them bare.
Thebest and safest forms of investment (as opposed to an insurance policyof physical gold and silver) will be high quality gold and silverproducers. We need to get away from the business model of "Print andDrill, Print and Drill" and exchange it for the 7-11 Business model.
Thinkabout it for a minute. How many 7-11s sell a quart of milk at a loss?The answer is zero. Never have, never will. If you are going to investin a junior, you need to know that they have a business model that willmake money some day."
I cut Moriarty's article,where he started to comment on acouple of miners he favours, including TNR Gold from Feb 2008. TNR has Los Azules, Shotgun with metals in the ground, El Salto, and El Tapau (good copper so far) - when MAI starts producing at Los Azules things should be interesting! (or buyout even before then?)
https://https://www.321gold.com/editorials/moriarty/moriarty021508.html