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Schumpeter Reincarnate

Joined: 16 Feb 2007
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We Will Now See a Gold Standard Imposed in Europe
PostPosted: Thu May 10, 2012 2:09 pm Reply with quoteBack to top

Leeb - We Will Now See a Gold Standard Imposed in Europe


With stocks trading lower, along with gold and silver, today King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. Leeb told KWN we will see a gold standard imposed on Europe. Leeb also said the Chinese will move to back the yuan with gold. Here is what Leeb had to say about the situation: “Gold is reacting to what’s going on in Europe. It’s the last resort of liquidity for a lot of people. It’s been the best performing major asset over the last 12 years. You have a lot of chaos in Europe and no one knows what’s happening, so there has been a lot of reflex selling of gold.”

Stephen Leeb continues: “Gold has been a bit stronger than I thought it would be considering the danger of a euro breakup is accelerating. I don’t think there’s any chance the euro holds together under its current form. Unemployment among the young in Greece is about 50%. That can’t stand, it just can’t.

These politicians can’t do this forever. People are not going to tolerate starvation. Sooner or later the politicians are going to have to respond. This means less austerity and more growth, and the end of German hegemony in Europe.

This looks similar to the end of World War I. Once the euro goes, it will be very much like the end of the war....

“You are going to have a lot of currency devaluation. You are also going to see massive inflation. Everybody knows what that means for gold.

So you are in the last hours of turbulence for the gold market (to the downside). Once this correction ends, you are going to have a barnburner to the upside. Gold will just vault. I don’t think investors will even remember these frustrating days. I had been warning we could see this drop in gold because of the problems in Europe, but investors should take advantage of it.

Look at what China is doing. China is buying gold hand over fist right now. They are going to move the yuan forward as the world’s reserve currency and it’s going to be partially backed by gold. The world can also expect to see a gold standard imposed on Europe in the next 12 to 18 months.

The junior gold stocks, the ones with honest to goodness reserves which have not been developed, they will see one of the greatest, if not the greatest bull market of all-time.

But many of the big stocks have become like dinosaurs. Stocks like Newmont and Barrick don’t have enough gold in the ground. So what’s bad for Newmont and Barrick, is incredibly good for gold. We are sitting on the cusp of what may be the greatest bull market we’ve ever seen in our lifetimes.”

Leeb also added: “Prospects for QE3 are rising. I think the stock market will make some sort of eventual top and just be range bound. This is what happens when you have inflation taking hold. We saw this in the 70s when stocks went nowhere for that entire decade, but gold and silver had massive gains.

The only place to be is going to be hard assets and commodities. Incidentally, both Glencore and Mitsubishi, two of the largest commodity companies in the world, have come out in the last day or so and stated that “commodity markets are tight.” Once this is liquidation is over, commodities will go crazy.”

"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912
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