Chinese gold

China Will Have World’s Largest Gold Reserves In 2 To 3 Years

King World Report,

21 February, 2013

Today acclaimed money manager Stephen Leeb told King World News that

“... within the next 2 or 3 years China is going to be the largest gold holder in the world.” Here is what Leeb had to say: “Obviously the markets are to say the least a little bit jittery. The key here is not so much what the Fed said yesterday when they again discussed that they may consider cutting back on quantitative easing, but it’s really the context in which that was said.”

Stephen Leeb continues:

“The reason I say this is because frankly the data on the economy is nothing to write home about. The numbers which were released yesterday which struck me had to do with the fact that banks are simply not lending out money. The so-called loan/deposit ratio, which is a percentage that banks loan out, has been falling dramatically.

Now what banks are doing with this money I really don’t know, but they have massive amounts of money on hand....

“But importantly the Fed is saying that they may get a little bit tighter at a time when data from Europe to the US is simply not good. That by itself is enough to cause a lot of jitters across the world.

So we have seen this turmoil in the gold market. This is a situation where the central are probably going to have to throw a bit more caution to the wind. It puts a knot in your stomach if you think that gold is the worldwide barometer, and of course we already know there is this shift of power going on from West to East.

I believe the Chinese will step in to the gold market and support at these levels because they have a populace which owns a lot of it, and they certainly have the wherewithal to fight any selling, especially if that selling is short selling. So I’m bullish. I’m flat out bullish on gold.

Any selling that’s going on here is just selling to the Chinese. The gold that is reported to be flowing to the Chinese through Hong Kong is only part of the story. The Chinese are importing gold from other sources. Certainly within the next 2 or 3 years China is going to be the largest gold holder in the world.

Again, I think that gold will continue to act as a barometer, and as gold continues in its bull market by heading thousands of dollars higher, the gold barometer is signaling the East triumphing over the West. Unfortunately, unless we begin to take this situation seriously in the West, that’s just how this is going to continue to unfold, and gold is going to reflect it. The bottom line is you are going to see dramatically and I mean dramatically higher prices. There is nothing that’s changed my mind about that at all.”