Today one of the top money managers in the world spoke with King World News about a surprising event that just took place in Dubai. He also answered the question: Is the price of gold really headed above $18,000?
Stephen Leeb: “There was a meeting in Dubai this past weekend with various ministers and economists. And one of the leading economists in Britain made a comment that caught my attention. He essentially said that there was an inevitability that gold would become part of a global Special Drawing Rights (SDR). He also said it would certainly help if China told us how much gold they have….
Continue reading the Stephen Leeb interview below…
“But you have to back to when gold plunged roughly 30 percent in 2013. Everyone expected the Bank for International Settlements to say that gold was a qualify top-tier liquidity buffer in the event of another 2008 – 2009 liquidity event. Ultimately the decline in 2013 mainly took place because the Bank for International Settlements did not mention gold as one of the assets that qualified as a liquidity buffer. In fact, gold was not mentioned at all.
At that point gold started to behaving in a way that was counterintuitive. When things got rough in Europe, there was really no upside response in the gold market. And when the crisis erupted in Cyprus, the gold market actually declined.
The BIS Was Desperate At The Time
The Bank for International Settlements essentially said that they were not considering gold as a currency. I think they did this because they were really desperate because gold was one of the best performing assets during the whole 2008 – 2009 catastrophe.
If the Bank for International Settlements would have said at that time that gold could be regarded as a currency, everyone would have been buying gold because it’s a much more reliable long-term currency than the dollar or anything else. The bottom line is the price of gold would have taken off to the upside if the BIS had blessed gold as a currency.
Gold To Officially Become A Currency Once Again
The significance of what the British economist just said in Dubai is that gold will most likely become part of a global currency, as part of the IMF’s SDR. If gold is included in that basket, which right now includes the dollar, the yen, the euro, the pound and probably the yuan, gold will once again officially become a currency.
Well, once you include gold along with all of these other fiat currencies, everyone is going to want to own gold because that’s the ultimate currency. The paper fiat currencies can be created at will, but there is a limited amount of physical gold in the world. So gold will be the true safe haven that everyone will want to possess.
BIS Just Delayed Gold's Rise
The implications of this are far-reaching. The price of gold may not begin to soar immediately because the Chinese and other nations in the East may still want to accumulate more. But even though the BIS has delayed the inevitable, when gold gets the official blessing as a currency, what you will have is a combination of paper currencies and gold. This will also mean gold has to be radically repriced to the upside.
Gold has already shown in the last century that it will outperform other commodities, keep up with other key assets and act as a true safe haven when commodities are not necessarily doing well.
Is The Price Of Gold Really Headed Above $18,000?
The bottom line is that we are now headed toward a monetary system in which gold will have a very, very important role. When you consider that the total value of all the gold in the world is dwarfed by global trade or any other metric you can imagine, you are looking at a situation where the price of gold is going to skyrocket many, many times higher than its current price. What I am saying is that the price of gold will eventually trade above the Dow, which is currently at 18,000.” ***ALSO RELEASED: This Key Nation Is Now Involved In A Major Battle Over Monetary Policy CLICK HERE.
If you are interested in purchasing physical gold and silver for delivery you can call Steve Quayle or his staff at (406)586-4842, or you can email them at [email protected]
The audio interviews with Dr. Paul Craig Roberts, Andrew Maguire, James Turk, Rick Rule, Bill Fleckenstein, Dr. Philippa Malmgren, Egon von Greyerz, Eric Sprott, Robert Arnott, Gerald Celente, Michael Pento, David Stockman, Marc Faber, Felix Zulauf, John Mauldin, John Embry and Rick Santelli are available now. Other recent KWN interviews include Jim Grant — to listen CLICK HERE.