Today acclaimed money manager Stephen Leeb told King World News,
“The first piece of data I look at, and I do it around 1AM to 2 AM
every morning, is how the Chinese yuan is performing. Recently the
Chinese yuan staged a very dramatic breakout. It is effectively at
all-time highs since China let the yuan semi-float around 20 years ago
Stephen Leeb continues:
“We know this is going to involve more
rounds of infrastructure. Many people say China has overbuilt. They
say China has too much of everything. This is just nonsense.
Regardless, China’s buildout is going to require a great deal of steel,
copper, and yes, silver.
The Chinese leadership
needs to worry about future water, silver, and gold supply needs. On
the flip side, a think tank just reported that China has 17 minerals
that the West will need. So China has a bit of a monopoly on certain
critical materials.
But China isn’t just going
to need gold, silver, and water. They will also need oil. What the IEA
is saying is a complete joke. These were the same people that were
saying that Saudi Arabia was going to produce 20 million barrels of
oil. Now they are saying US oil production will be greater than that of
Saudi Arabia by 2020.
These are crazy times, but
yes, China knows they will need gold, silver and oil. There is
surprisingly little gold left in this world. There is very little left
in the ground. This is one of the major reasons why you see major
mining companies having so much trouble with production, even though
gold has been in a 12-year uptrend.
These major just can’t
increase production, and increasing capital costs are hurting them as
well. This is why I believe gold, silver and the junior mining shares
are set to rise dramatically. I think this is especially true for the
junior miners because that’s the only place where you can find
meaningful supplies of incremental gold.
If you look at the hedge
fund Baupost, it has one of the best track records over the past 25
years. Baupost is a major holder of at least three junior gold mines.
These are mines that may not produce gold for at least 5, 7, or even 8
years.
But Baupost sees it. They
get it. So investors should own physical gold, physical silver, and
they should also invest in quality shares in this space because these
junior gold stocks could go up 30-fold over the next 5 to 8 years. This
will happen as people realize they have to own gold because paper money
is becoming more and more worthless.
“There has been a great deal of political pressure put on China to strengthen the yuan. The Chinese are responding to their transition to a new leadership. China’s new leader and leadership should be incredibly strong going forward. They will prepare the Chinese for the 21st century....
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