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Gold, Silver & The Smart Move By The Chinese In Commodities

Today acclaimed money manager Stephen Leeb spoke with King World News about the action in the metals: “You are going to see this (type of volatility). It’s going to be part of the dynamic for some time to come.” Leeb also discussed what the Chinese are doing right now in the commodity markets, and it will surprise KWN readers.

Here is what Leeb had to say: “People are still worried about Europe staying together, Eric. You still have massive unemployment in Spain and Greece, and you have the Germans who are very dependent on being in the eurozone because they are getting the benefits of a very cheap currency.”

Stephen Leeb continues:

“If Germany suddenly exited the eurozone, the German economy economy would fall apart, completely fall apart. By putting their currency with the Greek currency, the Spanish currency, the Italian currency, they end up with a much, much cheaper currency (net). This allows them to export, and this is what has been driving or keeping the Germany economy afloat.

So I think people are kind of missing it a little bit when they say Germany, the Netherlands, and Finland will form some sort of bloc and leave. No way....

Continue reading the Stephen Leeb interview below...

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“It’s not going to happen any time soon. But in the meantime there is a lot of volatility. Today Merkel visits Greece and she says they have to accept austerity. I think 25% unemployment is plenty of austerity. I’m sure that’s what they (the Greeks) are saying.

So the euro goes down, stocks go down, and gold goes down because people are scared something is going to go wrong like the euro breaking up, and (as a result) these banks are going to need instant liquidity. You are going to see this (type of volatility). It’s going to be part of the dynamic for some time to come.

You can add Europe to the equation when it comes to monetary easing. I think this is also a very important fact here Eric, Bernanke is basically going to ease and continue to ease until the economy really has forward momentum. He’s trying to create inflation because that is the only way people will feel comfortable investing.

That’s an invitation to buy gold. Buy gold, sell bonds, that’s where this whole thing is going.”

Leeb also added: “The Central Bank of China has been adding quite a bit of liquidity. What the Chinese are also doing is they are starting to rely on a strong yuan because they want to get the price of commodities down (in terms of price for China). They can get them down by creating a much stronger currency, and they are doing that.

That is also very bullish for gold. So Bernanke is telling you to buy gold, Europe is going to be inflating, China looks like they are going to be inflating. It all adds up to one thing, you buy gold. So if gold comes down here, and I can’t say it won’t down to $1,700, again, I mean who knows? But I can say it’s really going to take off (to the upside at some point).”

This is a tremendous interview with Stephen Leeb. He discusses gold at length, as well as silver, Europe, China, the US and what to expect going forward. The KWN interview with Stephen Leeb will be is available now and you can listen to it by CLICKING HERE.

Dr. Stephen Leeb: Chairman & Chief Investment Officer of Leeb Capital Management and the

author of “Red Alert: How China's Growing Prosperity Threatens the American Way of Life”

Just released, to order from Amazon CLICK HERE.

The interviews with Stephen Leeb, John Embry, Gerald Celente, Rick Santelli, Michael Pento and Don Coxe are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included, Pierre Lassonde, Rick Rule, Nigel Farage, Ben Davies, and Dr. Keith Barron by CLICKING HERE.

Eric King

KingWorldNews.com

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