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No, You Do Not Hear the Fat Lady Warming Up
Contributed Opinion

Source:

Bob Moriarty Bob Moriarty of 321gold comments on where he believes the economy is heading.

Those who never predicted a financial collapse in the first place are now edging closer to the swamp to dip their toes into the water. Now they are suggesting, perhaps we could have a recession."

Forget that. You cannot have every supply chain in the world chopped in two and have a recession. A depression was baked into the cake before the Corona popped out of the six-pack. The US government dumping a $6 trillion dollar bailout for their buddies that has more pork in it than the butt of a two-ton pig is the proverbial pissing up a rope. We are in a depression. The entire financial system, education system, medical system, political system, hell, the entire artifice needs a total reset.

What do we get? More of the same. Well, if the government created the workspace for the depression by unlimited debt and financial chicanery, you are not going to fix it with more of the same.

Americans are unlike any other people on earth. At heart they want to trust their government. Granted, the Democrats understand that the Republicans are at the heart of all evil. And Republicans know full well that the Democrats caused all of the problems in the country but both agree that if only we elect their pet fools, all would be well with the world.

No other country on earth actually trusts their government. Their people growl and on occasion turn out in the streets to man the barricades but they know deep in their hearts that their "leaders" are fools who can do nothing well. Americans are always shocked to find their elected representatives are idiots. The rest of the world simply assumes stupidity and cupidity on their behalf and find themselves rarely disappointed.

Ignore the virus for a moment. True, it will kill tens of millions of people but everyone alive is going to die someday anyway. All the virus will do is accelerate the process. Some of those who survive will figure out how to cope.

The depression is another story. Already pundits are suggesting that investors should buy the dip. The FDIC actually put out a video saying, your money in the bank is safe. Do not withdraw your money. Are you kidding me, they really said that?

I'm told the FDIC chairman who actually put out the video was confused by the message. She stated in the first take of the video that "we are proud of the fact that since 1933 no American depositor covered by the FDIC ever lost a cent up until now. That's a 99% success rate for us." Naturally they had to brief her and rewrite her lines.

The message was clear. Just moments before a bank closes the president of the bank says, "Your money is perfectly safe in our bank." And then slams the door forever.

Banks are going to close. The financial system may well shut down for a period. Lots of investors will go to bed rich and wake up poor.

Buying the dip is probably a really bad idea. We have had a crash. We have had a dead cat bounce and we are about to go back to the crash mode. Nothing at all has been fixed.

Between now and the end of this year I suspect the total drop will be between 85 and 92%. It could be worse. In the case of resource stocks, when the margin clerk calls, everything gets sold. Everything.

I have a lot of core positions of stocks I love. I will be putting in stink bids 20% lower than the close of shares I like the day before. While drops of 20% are common, drops of 25% are not. The value of these shares has not changed at all, only the price. Actually that's not totally true, the latest $6 trillion piggy giveaway pretty much guarantees higher prices for real assets in the future. Keep some cash for screaming deals.

Rely on yourself, your family and your friends. The government is not your friend, not now, not ever.

Bob Moriarty
President: 321gold
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Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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