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Stephen Leeb - Expect QE3, QE4 and 40% to 50% Inflation

With gold trading at $1,700 and silver near $33, today King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. When asked about the recent action in gold, Leeb responded, “I think gold coming down yesterday and being somewhat off its high has nothing to do with the underlying fundamentals for gold. In fact it is not an exaggeration to say the underlying fundamentals are getting stronger by the day. So when gold comes down 10, 15, 20%, really it’s reflecting liquidity concerns.”

Stephen Leeb continues:

“Gold has been on an eleven or twelve year roll and that’s not an accident, it’s not a coincidence, it’s not an aberration. But one price to pay for that is occasionally you are going to see profit taking motivated in part by people offsetting losses in other investments. The message to investors is that if you see gold weaken, even if it weakens more than you suspect, I would take advantage of it.

These bull markets are not accidents. These are not fabricated because a bunch of people are saying buy gold. The foundation of this bull market is that there are no paper currencies out there that are worth anything. I mean today news comes from the last Fed minutes that several Fed members are considering additional easing.

That’s a very strong statement given that inflation in this country is already around 3 1/2%. What they are seeing, the Fed, is that the bottom part of the United States is struggling right now. It’s probably not an exaggeration to say that the lower 30% of the US is only off the streets by grace of government largess, including food stamps, etc....

Continue reading the Stephen Leeb interview below...

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“It’s a very serous situation and those are the kinds of things, I believe, the Fed is looking at that are likely to motivate further easing, QE3, QE4 and what not. With all of these problems, for all the willingness to ease, the dollar is still standing out as the world’s reserve currency.

Now if the dollar, with all of these problems is the best paper currency you can turn to, you better not miss out on having gold and other precious metals in your portfolio. The dollar is no shelter from any storm that we’re likely to experience.”

When asked about Thanksgiving dinner for the average family being 13% more expensive this year, Leeb remarked, “Japan, in the aftermath of World War II, their inflation reached 40%. To deal with so many things you’re likely dealing with inflation that is going to be the highest in American history. If you told me 40 or 50% (inflation), I think I might be more relieved than terrified.”

The KWN interview with Stephen Leeb will be available shortly and you can listen to it by CLICKING HERE.