Wednesday, January 9, 2013

This Will be the Year the Chinese Let Gold and Silver Fly Higher

"If you are the Chinese and you want to recapitalize your banks and get rid of those bad loans, you go along with gold as a Tier-1 asset and you let gold’s value rise. And presto, you have covered those bad loans and you’ve recapitalized your banks.

That’s reason number two for gold because there is nobody with more money in the world and who is more capable of adding gold (to their reserves) than the Chinese. I think China ended the year with about $3.3 trillion of foreign exchange reserves.

In a world where there is a race to the bottom in currencies, do you really think the Chinese want to hold their reserves in euros, dollars and yen? No. They are going to hold them in gold and let gold go higher. This may be the year in which the Chinese really do let gold fly. When gold starts underlying their currency, it’s game over. The Chinese have won.”

- Stephen Leeb via a recent King World News interview, read the full interview here: