Leeb:  The United States has become dependent on foreign nations for critical commodities.  These are commodities that the average person is not aware of but nevertheless are incredibly critical....

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“One group of commodities people have talked about are rare earths, but that’s really only one of many in which the U.S. dependency has grown throughout the years. 

Before the start of the Great Recession, the United States imported 100 percent of 20 critical commodities.  Today that number has grown to 22 commodities.  This is really remarkable when you consider how much lower our capital needs are in the context of today’s economy.

The U.S. is a very, very dependent country, Eric.  A study was passed along to Congress that illustrated how dependent the U.S. is in terms of accessing its commodities.  The country the U.S. is most dependent on is China.  That is not a good situation at all.

Well, this morning news came out that tougher sanctions are being placed on Russia by both the U.S. and the European Union.  My fear right now, Eric, is we think of Russia as being like Iran.  We are greatly underestimating Russia in my opinion.  This is a dangerous game.

What people forget is that Russia is the leading commodity supplier in the world.  China really can’t exist without Russia.  China needs a lot of their commodities and so does the West.  So you’ve got this interdependency going on there with Russia being in a unique situation.  At the end of the Cold War, Russia experienced ten horrific years.  Their incomes collapsed so much that life expectancy fell by several years.

So this is a country that can easily tolerate a lot of pain, a lot more pain than we can in the United States.  What I fear right now is that it could be ‘all-in’ as far as Putin goes.  As an example, Russia and Germany own the trains that are the source of transportation for Germany’s economic growth over the next 5 years.  They transport the goods back and forth from Germany to China.

So Russia is at the center of things, and at the same time the United States has become a very dependent country.  But we are sanctioning Russia as if they were just Iran.  They are not Iran.  Putin is no fool and he will play this game ruthlessly.  If the West thinks they are just going to get rid of Putin and find somebody else they are making a big tactical error.

So the U.S. is playing a dangerous game, and in the midst of all this you have the gold market setting up like a coiled spring.  The gold market is just waiting for signs of further capitulation of U.S. hegemony in major financial markets.  And I think we are getting closer and closer to realizing that sign.

Once it becomes clear that the U.S. is continuing to lose power in this world, it will be too late to buy gold.  Gold will be taking off like a bat out of hell.  I’ve told you for the last month or so that I sense there is a bid under the gold market.  I believe that bid is from China.  They want the gold right now.  So as the power continues to flow from the West to the East, gold and silver are the best plays from any reasonable long term perspective.

In my opinion, investors have to overweight gold and silver as much as possible in their portfolios because  I don’t see how this ends in anything but tears for the West, and this will eventually lead to a mania in the gold and silver markets.  This is why investors must get positioned in the metals now.”

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