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Stephen Leeb continues:


“The Chinese don’t want to see the price of gold take off because they still want to buy a lot of it.  The Chinese took in at least 1,000 tons of gold last year, and maybe even more.  This total represents Hong Kong imports plus their own production.


This year the Chinese are really going to play the game much more aggressively with these Shanghai markets that are going to have international players actively trading in them.  They will also trade derivatives, and the Chinese will accumulate gold through their new ETF.


The trouble the Chinese have is their internal production of gold is becoming more difficult to maintain....


Continue reading the Stephen Leeb interview below...




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“They just can’t, like so many others, replace the gold reserves, which would then be exploited in future mining. 


It’s extraordinary up to now the percentage of reserves the Chinese have been mining, up to 35% of their gold reserves.  I’ve never seen any country mine that percentage of reserves for any metal.  You look at the pace of their mining and you can easily conclude they are desperate for gold.


If the gold price lifts off, that poses a major threat to the US dollar.  So the United States has been the leader in the gold price suppression scheme.  This is why so much gold has left Western vaults.  The Germans now want their gold back from the Fed. 


So Germany has asked for the gold stored at the Fed to be returned to Germany.  The amount of gold the US supposedly has stored for the Germans is 1,536 tons.  This can certainly be shipped to Germany.  Yet it’s going to take 6 or 7 years to return a small portion of the gold to Germany?  Why?


They ship much more oil than gold.  This is ridiculous.  What do they expect?  Do they expect the gold to blow up?  Last I heard gold doesn’t even oxidize or even tarnish, much less blow up.  Why can’t they just load it on a ship or on planes and send it?  Something doesn’t add up here, Eric.


The reality here is that the German gold has been leased out and it’s not sitting in the vault.  So the Fed has agreed to return very small portions of the German gold each year, which is supposedly stored at the Fed.  Well, the gold isn’t there and that’s why it is going back to Germany in small portions each year.


People also need to remember gold is not going down much, because the US doesn’t have enough to sell.  The problem is what you sell in the physical market, you have to deliver.  At a certain point, the US will run out of other countries gold to sell.  The US will reach a point where they have to hope that the gold price doesn’t start to really fly.


There is a strong bid for gold every time it goes down.  When the cat gets out of the bag, and I think the Germans are helping the cat get out of the bag, at a certain point when all of the gold moving from West to East is stopped, the price of gold will really begin to ramp up in price.


Where will the gold come from to satisfy the demand?  Where will the gold come from to send back to Germany?  And do you know what the Chinese will say?  They will say, ‘OK, we will let our banks hold the yuan, but in contrast to your dollar, our yuan will be backed by gold.’ 


What will countries prefer to hold, the yuan, backed by gold, or the US dollar, which is backed by absolutely nothing?  So we are now getting to a situation where we are getting close to the end game.”


Leeb also spoke about silver:  “Switching gears to silver, we all know there are shenanigans that go on in the silver market.  Regardless, China wants to accumulate a great deal of physical silver.  China knows silver is a monetary metal.


It’s also important to note that Warren Buffett recently purchased the largest solar project in the world.  Well, the Chinese know what Warren Buffett knows, and that is solar is the future.  The Chinese are going to need a staggering amount of silver to accomplish this task.


The Chinese know that oil, coal, and other alternatives are becoming much more scarce, and so they are designing the entire country’s energy infrastructure around things like solar.  Again, this will require quantities of silver that most likely can’t even be facilitated. 


People wonder why are we seeing shortages in the silver market right now?  Well, yes, there is investment demand, absolutely.  But the Chinese are also in the silver market buying every single ounce they can get their hands on for the energy needs.


So silver is going to levels in the future that investors can’t even fathom today?  Silver, next to oil, is the single most important commodity and strategic resource on the planet.  I would also add that the quality junior mining shares will eventually enter a mania that will be one for the history books.”  


© 2013 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 Bill Fleckenstein, John Hathaway, Egon von Greyerz, Ben Davies, Kevin Bambrough, Nigel Farage, Eric Sprott, Art Cashin, and John Mauldin are available now.  Also, be sure to listen to the other recent KWN interviews which include John Embry, Gerald Celente, and Andrew Maguire by CLICKING HERE.


Eric King

KingWorldNews.com

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