Leeb: “I have noticed for some time that the coverage for gold and China by the mainstream media are unrelentingly negative.  Last night, as an example, Bloomberg’s headline was, ‘Chinese Imports Of Gold Fall On Lower Gold Price.’  Well, the reality is that it fell month-to-month from 104 tons to 101 tons.  China is on a path to import, just through Hong Kong, 1,200 tons of gold at this pace....

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“That’s the story.  That’s a phenomenal amount of gold.  That by itself would probably make China the largest consumer of gold in the world. 

Now, to me that’s the story, not that it fell an insignificant amount from month-to-month.  But yet when you look at the news you get the impression that China is giving up on gold, when in fact their import numbers are spectacularly high.

One of the reasons they gave for this miniscule decline in gold imports is that the Chinese government is making it harder to use gold as financing.  So there was a major reason that could have really slowed down gold imports, but it didn’t slow them down at all.  Actually, that should be the story -- that despite government restrictions on using gold as a financing vehicle, imports remained over 100 tons. 

Again, the story should have been how little gold imports dropped, and the fact that they remained over 100 tons near record highs.  If you read Bloomberg stories on China, you would think the country is ready to crumble any day now -- that some sort of cascading series of events will get the dominos tumbling all over China.  That could not be further from the truth.  The latest data from China is that manufacturing is improving, along with the service sector. 

The Chinese are also going full speed ahead at moving the economy toward more consumer consumption.  The head of BHP, who may know something about China, said, ‘We don’t see much going on with China.  In fact, we expect commodity demand to jump by 75% over the next 15 years.’  But, again, if you read Bloomberg, reports from Fitch and others, you would think China is collapsing.  Well, it’s not collapsing, nor is the demand for gold collapsing. 

It’s fashionable in the mainstream media to tear down gold, and I understand that because it is a major threat to the U.S. dollar.  If the world ever starts to price key commodities such as oil in gold, it’s goodbye dollar, hello hyperinflation.  So it seems to me that the mainstream media has been directed to attack both China and gold because the combination of the yuan and gold is now seen as the major threat to the U.S. dollar.

Well, guess what:  Despite all of the negative propaganda, the yuan hit a 19-year high last night.  This is a new high since the yuan began freely trading.  But if you looked at the mainstream media stories up to last night, you would think the yuan was ready to crash.

The bottom line, Eric, is that the West is desperately throwing everything they can at gold and China, in an attempt to destroy investor psychology toward these two investment themes.  But it is becoming very apparent that gold and the yuan are becoming the next big thing in the currency world.

So I understand why the West is doing this, because if the dollar goes as the reserve currency, inflation goes through the roof in this country.  Meanwhile, every major nation sees that China is rising and yuan is ascending rapidly.  If anything, this is just telegraphing the desperation on the part of the West -- the Western mainstream media propaganda.  This really shows how scared the West is about what is developing in China. 

But the gold keeps flowing from West to East, and it’s just a question of when the jig is up for the West.  For investors, I would use these days when you’ve got gold trading in the $1,200s to accumulate physical gold.  You are not looking at a 20% to 30% move higher in gold.  You are looking at a 10-fold move higher in the price of gold over time. 

You are probably looking at a 20-fold move higher in the price of silver.  The bottom line is that the West’s attempts to suppress the price of both gold and silver will be seen to have utterly failed in the fullness of time.”

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