With gold drifting higher and the US Dollar Index barely clinging to the critical 80 level, today an acclaimed money manager spoke with King World News about Ukraine, Germany, Russia, China and the move to a new world currency which includes gold. Below is what Stephen Leeb had to say in this fascinating interview.
Leeb: “I’m very focused on what’s going on in the Ukraine, and the interplay between the United States, the Europeans, and Russia. This underlies the U.S. weakness in the world. How many people can we sanction? How many people can we support where it ends badly? Egypt comes to mind.
And Russia, with their hold on European energy and their hold on the Ukrainian economy, the U.S. threatening them with sanctions seems ridiculous. This is just a hollow threat.
“All of this underlines a totally failed U.S. foreign policy and a profound weakness on the part of the West. Europe and the U.S. may be divided, and I think Putin knows this. Putin knows he can afford to wait, and I don’t think this crisis is over by a long shot.
It’s clearly in the interests of Russia to have high oil prices in the world. In fact, whatever international strength the Russians have comes first from their endowment of natural resources, in particular oil and natural gas, and also their military. Russia has a much larger standing military than we do. Russia’s military technology has also improved.
People need to be prepared for Russia doing whatever it can do to exacerbate our weaknesses, which are in the energy area. Russia can shut off a lot of oil and energy to Europe which flows from Ukraine. This would create problems for Europe.
Whatever may think about what happened in Ukraine, the world is in a situation where oil is the barometer you want to follow. Gold is undervalued vs. oil, so gold should do very well. If Russia is able to provoke higher oil prices through any number of means, we are going to see a replay of the massive spike in oil we saw 6 or 7 years ago. That was great time for holders of gold and silver as well.
What is happening in China is also potentially very undermining of U.S. interests. The Chinese are growing closer and closer to Russia. The Chinese are going to need a lot of oil to build out the infrastructure they are planning. But all of this is setting the stage for a new reserve currency. I’ve felt this for a long, long time.
And I think the three really powerful countries are Russia, China, and Germany. A reserve currency involving those three countries and gold is the direction the world is headed. So the implications for gold are incredibly positive. There is no doubt that the asset of this decade will again be gold. People forget that gold has only had one down year since 2001.
Circling back to Putin, oil is Russia’s strength and he is probably going to do anything he can to keep the price of oil high. Putin has a lot of cards to play via Iran, Ukraine, and other key areas. So I think it’s a very, very dangerous world not just geopolitically, but economically as well.
So I would urge KWN readers around the world to hold gold and silver in their portfolios. Also, if they see oil taking off to the upside, they may want to consider adding more gold and silver to their portfolios because these are going to be the commodities to own in the coming year.”
Source King World News