Stephen Leeb continues:

“My advice is if we get a dip in gold, I would buy that dip.  Gold has a lot of support.  I think long-term and that’s a bet that I’m always willing to make.  I haven’t sold a single ounce of gold or a single share of a gold stock.  That is because I am positioning and I am thinking about the long-term.

I am going to tell you what reassures me....

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“China is what reassures me.  Data came out of China on Monday that their gold purchases increased by a huge percentage from August to September.  China, year-over-year, has increased their purchases of gold by a staggering three-fold.

China is in this to make sure they have something tangible they can trade for commodities, which they know they are going to need at some point in the future.  People talk about China and say it is overbuilt, but that’s not entirely true.  If you look on a per capita basis, China has 1/15 as many railways as the US has. 

Why is that important?  Because railways are a way of saving energy and a way of transporting commodities from coast to coast, across the country.  Why did Warren Buffett make his biggest investment into Burlington Northern?  He gets it and it’s all about commodities and transportation.  This is about building out infrastructure. 

China wants gold so they can continue with their plans.  They want their currency backed up in gold and they are going to continue to buy it.  So gold may weaken, but if it does people should buy it.  Once gold starts taking out the all-important $1,800 level, you are not going to have a chance to get into the market.  It will not let you in. 

You are going to have to chase the market.  This entire past year has been great for people wanting to accumulate gold because there were no runaway moves.  At some point there will be no dips and you are going to have to steel yourself to buy gold on the way up.  People might think, how do you get yourself to buy something that’s gone from $250 to $1,700?

I’ll tell you why you should buy it, you should buy it because it’s going to $10,000.  You haven’t seen any inflation yet.  When gold heads up in earnest, it will be an extended, protracted type of move.  This has just been a waiting game so far.  But wait until we have inflation, then you will see what gold can really do. 

KWN readers need to remember that a bull market which goes up ten or fifteen-fold will hide your other investment sins.  This bull market will take place in junior gold stocks.”

Leeb had this to say regarding silver:  “Having said all of this, if there is one investment that can possibly rival gold, it’s silver.  People don’t realize this, but at some point governments may say to their people, ‘We need the silver and you have to stop buying it.’  When that point comes, silver is likely to be at $150 to $200.  So there is still a lot of room in the silver market.”

Leeb also added: “One thing that upsets me, and I’m in this business to help people, is when the cusp of the baby boomers are retiring and you see so many of their financial advisors telling them to put their money into bond funds.  Gold is not even considered. 

But putting money into bond funds is crazy.  They are putting it in because they think bond funds are safe.  In the 1970s the worst investment you could have made was in bonds.  You lost an incredible amount of purchasing power by putting money into bonds in the 70s.  This time around the losses could be much greater than that.  So remember to put an allocation into physical gold and the shares.  That way you will at least have a fighting chance in the turbulent years to come.”

© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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 John Hathaway, John Embry, Stephen Leeb, Don Coxe (BMO $538 billion), Rick Rule, James Turk and Egon von Greyerz are available now.  Also, be sure to listen to other recent KWN interviews which included MEP Nigel Farage, Jean-Marie Eveillard, and Art Cashin (UBS $612 billion) by CLICKING HERE.

Eric King

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© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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