Podcast Interview with Eric King of King World News and Dr. Stephen Leeb, Ph.D.
As we head into the tail end of 2014, today an acclaimed money manager spoke with King World News about 2015 being the year of the Great Inflation. Stephen Leeb also spoke about gold, silver, and what investors should be doing ahead of the coming chaos as he believes that the price of oil will double over the next 12 months.
Leeb: “For the first time in a long time I can say my primary focus is just gold and silver. Gold is holding up well now, despite the fact that it could be going lower. And when something acts counter to what could be expected, there is usually something deeper in the background that is controlling things. This is something that is overwhelming what is immediately in front of you….
“What you see in front of you is a massive decline in oil prices and weakness in everything but gold and silver as far as commodities. So this is extremely unusual action. I can’t stress enough how unusual this action is.
Gold has historically traded with other commodities. But recently commodities have been weakening and so far the gold market has held up very well. That tells me that there is some trouble happening behind the scenes that we don’t know about yet.
My guess is that the reflation we have been seeing in Japan, Europe, China, and the United States, is now going to take hold in a major way. This will mean a serious turn higher in the price of all commodities because major inflation is on the way. This means we are headed into a world where once again there is a mismatch between commodity demand and supply. We know that everybody has cut back on commodity production and that the entire world is easing.
This is a world in which the central planners are pulling out all the stops in a desperate attempt to get the economies to accelerate. It is important to keep in mind that even though commodity prices have come down, they are so much higher than they were 15 years ago. And supplies in many commodities are tight. This situation has only been able to continue because of near-depression like conditions in Europe and the United States.
But we may be at a significant turning point, and I expect oil prices to double over the next 12 months. This is why the gold market is acting so resilient — it is anticipating this huge move higher in commodity prices over the next year. Gold and silver will be leading this move. The East is ascending and they are coming together to form their own currency. The Middle East is also in favor of this and they are part of the Silk Road.
So gold is not only anticipating a rise in commodity prices, but also a way in which commodities are priced. You will see oil coming out of the Middle East priced in a basket of currencies which includes gold. Gold will also be backing the yuan. That will leave the U.S. dollar out in the cold. This will also sharply accelerate the move in commodity prices as the dollar tanks. This is what the action in gold is telling us.
This action is telling us something that is not apparent — that 2015 could be the year of the Great Inflation. You just don’t see gold holding up this well in the face of a 30 percent decline in the price of oil. This tells you that the world is at a major inflection point. So people need to be prepared for this major turn and a massive change in the global monetary system. This is why it’s so important for investors to own physical gold and silver — it will protect their purchasing power during the coming chaotic transition.”
AUTHOR…INVESTMENT ADVISER…MONEY MANAGER
Stephen Leeb is a prolific author, investment adviser, and money manager who has been analyzing financial markets for more than 40 years. He is known for his prescience in connecting the dots among hidden or overlooked trends – macroeconomic, scientific, and geopolitical – and accurately describing the investment implications, often going against the conventional wisdom. He is the author of nine books on investing and geopolitical trends including his most recent book, China’s Rise and the New Age of Gold: How Investors Can Profit from a Changing World (2020, McGraw-Hill Education). He is founder and editor of the award-winning investment letter The Complete Investor, published by Capitol Information Group, a Washington, D.C.-based financial publisher. Stephen is chief investment officer of his own wealth management firm based in New York City.