Gold and Silver • The Greatest Bull Market, A Gold Standard & Silver Shortages
The Greatest Bull Market, A Gold Standard & Silver Shortages
Today acclaimed money manager Stephen Leeb, told KWN, “The world is rapidly heading toward what you would call a ‘de facto’ gold standard” and that we will see “shortages of silver over the next 5 to 10 years, massive shortages.” Leeb, who is Chairman & Chief Investment Officer of Leeb Capital Management, also told King World News that investors are now “looking toward what I believe is going to be the greatest bull market of our lifetime — the one in junior miners.” But first, here is what Leeb had to say about the situation in Europe: “For a few hours after the Greek results were announced, investors were breathing a sigh of relief. Initially we saw a big uptick in stocks, commodities, but gold was trading lower. Then investors realized the elections didn’t mean a whole lot.”
“At that point you saw gold recover some, while stocks gave up the overnight enthusiasm they enjoyed in the futures markets. At the end of the day, Europe is a mess, and it is still up to the Europeans to decide what to do to get out of this situation.
The strongest evidence of the continued chaos in Europe is a chart of the Spanish bond yields. Spanish bond yields are now approaching 8%. That’s a crazy number….
“How in the world can Spain engage in anything? How can they maintain growth in the face of austerity?
How can they do anything if they are paying 8% to borrow money? The short answer is they can’t do anything. Right behind Spain is Italy, a much bigger economy, and their bond yields are now north of 6%. How long before their yields go above 7%?
So the wolves are at the door and it’s the door to (German Chancellor) Merkel’s home. My guess is she is going to cave. The Mexican central banker, Ortiz, who is widely regarded as one of the clear thinkers, was quoted as saying they can stop the problem in Europe almost immediately, ‘by carrying out a massive round of government bond purchases.’
I think that’s where we have to go. In other words, just as our Fed has printed literally trillions of dollars by buying our bonds, the European central bank has to do something very similar.
Where will everybody turn to for safety in that atmosphere? Gold. I know China is turning to gold, they’ve been buying it hand over fist. In addition to being the world’s number one producer of gold, they are buying as much as they possibly can in the open market.
So I think the world is rapidly heading toward what you would call a ‘de facto’ gold standard. I think the winners are going to be those with precious metals. Investors can accumulate gold right now, but once the turmoil in Europe is over, just back up the truck.
Investors also need to remember these junior gold miners. Over the last couple of years the junior gold miners have been dreadful. There were many days when gold was up and the juniors were down.
Today we see gold is flat, but the junior miners are up about 3%. That kind of divergence is so unusual over the past two or three years. It tells you that investors are looking past whatever kind of turbulence you may see in Europe, and looking toward what I believe is going to be the greatest bull market of our lifetime — the one in junior miners.
The same could be said for silver. Japan is just now putting in 3.2 gigawatts of solar. Now 3.2 gigawatts of solar is not a lot, but that small amount of solar requires about 400 tons of silver. That is just the first step in Japan. You know China will be coming in behind the Japanese with heavy solar use. What you are talking about here is shortages of silver over the next 5 to 10 years, massive shortages.
So people who are betting against fiat currencies, paper currencies, and betting on precious metals, I think their time is coming around again. I would urge all KWN readers globally, don’t make the mistake of selling your gold as it clears $2,000. The move will only be getting just started when gold reaches $2,000 to $2,200.
The people who make the really big money in these markets are those who hang on for the mania, and getting to $2,000 will not be a big deal. The bottom line is there could still be a little turbulence, but the lights are basically flashing green for gold, silver and junior mining shares.”
Statistics: Posted by DIGGER DAN — Wed Jun 20, 2012 1:55 am
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