Leeb:  “People don’t completely understand this because the stock market is on the move, but the reality is that  the US is in a great deal of danger.  There is a ‘black swan’ out there than could very easily destroy the US dollar and collapse the United States....

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“The Fed’s balance sheet is now close to $4 trillion.  What is going to happen if all of the sudden there is an interest rate shock?  At some point, China can and probably will declare war on the US dollar and destroy it when they are ready. The way to begin that war would be to instigate an interest rate shock in the US.

If China were to shock the West by coming together with Japan, when the time is right, they could wreak havoc in the US bond market as well as the US dollar.  The chaos of the Chinese declaring war on the dollar could quite possibly collapse the currency altogether.

As the West continues to hemorrhage what remaining gold it has left in its vaults to the East, this is setting the stage, when the time is right, for the Chinese to end the US dollar’s reign, and install the yuan as the dominant currency in the world.  This is why the US is so desperately trying to set up trade agreements in Asia and elsewhere in the world in US dollars.

As I previously told you, the Chinese still want to accumulate another 5,000 tons of gold.  But when the Chinese are ready, and they declare war on the US dollar, that’s a war the US will lose.  So, yes, the Chinese would definitely win a war against the dollar.

It also important for people to understand the nations have gone from fearing China, because of their immense size in the Asian economy, to wanting to cozy up to China.  This is happening because they don’t feel they can trust America anymore.  As this distrust in America grows, China’s influence continues to soar. 

China is now rapidly ascending to power because of the chaos in Washington.  Obamacare is perceived around the world as a catastrophe for the US, and the US is spying on the entire world.  All of this resonates very badly with other countries and their leaders.  No wonder the Asians are coming together with China.

When the Chinese unleash that war on the dollar it will force the Fed to step in and buy even more bonds.  This will only make the situation even worse.  This will create hundreds of billions of dollars of losses on the Fed’s balance sheet.  This is something Congressmen have repeatedly warned Fed Chairman Bernanke about.  The Fed’s response to that crisis could literally set the stage for hyperinflation.  At that point it would be game over for the dollar and for the US.

But, Eric, what is inevitable is that there will be a chess move by the Chinese that takes the dollar out of the game.  Just like the US made the dollar convertible into gold because they possessed so much gold in 1944, the Chinese are moving aggressively in that direction as fast as they possibly can.  So, all of this will happen, it’s just a question of, when is it going to happen? 

The flow of physical gold into China right now is absolutely staggering.  This is not a good situation.  I wish it were different, I really do, because all of the Western nations are in danger of a much more serious collapse in terms of the standard of living of their citizens when this materializes.”

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