GOLD $10,000 Silver $500 – Stephen Leeb


Today acclaimed money manager Stephen Leeb told King World News what the Fed is doing right now is unethical.  Leeb also said Warren Buffett is desperate and policymakers are scared to death.  Leeb is Chairman & Chief Investment Officer of Leeb Capital Management.  Here is what he had to say: “There’s really only one currency in this world and that’s gold, period.  You’re going to need gold, eventually, to buy oil, to buy food, to buy real estate.  Just those three (assets), if you look at the dollars that are now transacted in all energy, food and real estate, you come up with a number like $36 trillion a year.”


“All of the gold in the world is only worth $9 trillion.  Looking forward three to five years, you have to come up with $10,000 gold.  You have to.  Everything else is being devalued.  So you come up with very high targets for gold.”


When asked what is wrong with central planners letting gold advance to fair value, Leeb responded, “I think it would really frighten people.  It would take the covers off what’s underneath, which is just a lot of junk that really cannot be valued appropriately.


It would take the blanket off of what is a broken financial system.  There is an inevitability to this, but everyone fights change, Eric.  This goes back to (Emile) Durkheim, the famous 19th century sociologist, who said, ‘The worst thing that can happen to people is change.’  They hate it.


“One of the examples he used, were of people who all of the sudden win a lottery.  They too are suicide potentials because all of the sudden their identity has been changed.  It’s natural, everybody fights change, but in the end it’s inevitable and it’s just the pace at which it (change) occurs.  That’s all you are seeing with gold right now.


It’s not a question of whether you are going to get to $3,000, $5,000, $8,000 or $10,000 in gold and $500 in silver, it’s a question of the trajectory it follows.  That’s all it is.  If you see it down $100, you just buy more.  Have a buying program every month.


Every time you see gold drop a little bit, everybody comes out of the woodwork and says it’s a relic.  This is not the mood you see in a market that doesn’t have massive upside ahead of itself.”


Leeb also had this to say regarding recent central bank intervention in gold:  “Of course it’s unethical.  Anytime major banks get together and collude and try to affect asset prices, it’s unethical.  There’s no doubt it’s unethical.  It’s (also) unethical what the Fed is doing now.”


Leeb went after Warren Buffett:  “I hate to say this because I’ve been a fan of Warren Buffet for so many years, but he lives and breathes the S&P.  That’s his Bible, so to speak, stocks.  He comes out and makes a comment (denigrating gold) that is so off base and so misleading, it sort of tells you even the best and the smartest are getting a little bit desperate in terms of trying to hide what is really happening to this world.


There is no doubt in my mind that if you were to ask Buffett straight out, ‘Let’s suppose, Berkshire Hathaway, someone makes you an off for the entire stock.  Would you rather that offer be in dollars or in gold?’  


Now if he tells you dollars, you say, ‘Mr. Buffett, read above where you point out that dollar values have gone down by 80% or 90% over the past 30 to 50 years.  Down relative to what?  Gold.  So you (Mr. Buffett) are telling me despite dollar values being down and steadily going down, you would still rather take dollars than gold?  Get real.’


My point here is when you get guys like Buffett so desperate that they are making these contradiction in terms (3 paragraphs from each section in the article) and seeing them contradict each other, people like that making those kinds of mistakes tells you there is a certain psychology of desperation.  People are scared to death, especially policymakers.”      


This was Stephen Leeb’s most powerful interview ever given on King World News.  He went after the Fed, central planners, Warren Buffett and others and wasn’t pulling any punches.

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