The
acclaimed money manager also discussed gold, but first, when asked about the
dire situation the ECB faces, Leeb responded, “They’ve got to start
buying bonds, period. It’s very simple, Spain cannot survive with bond yields
over 7%. I doubt they can survive with bond yields much over 5%, when you’ve
got no growth and 25% unemployment.”
Stephen Leeb
continues:
“25% unemployment is the kind of unemployment we had
during the (Great) Depression. It surprised me (that the ECB did not take
significant action), and it makes me think, what is going on behind the scenes?
My guess is we are putting tremendous pressure on Germany.
Every other country in Europe, including Great
Britain, is ready to ease and buy bonds....
“I think we will provide them (Germany) cover. If
the US is doing it and it is being done in concert with the United States, the
Germans have a very credible out. They are not in a position, like Russia and
China, to fight the United States.
They need us for their own physical security, and
right now we need them for our own and physical security because if our economy
starts to collapse, there is no doubt about it, all of our securities are in
jeopardy. We are not going to allow one country to create that kind of shock
which could occur in the West.
I think they (Germany) will relent and I’m going to
predict you will see easing before the next Fed meeting, within the next three
to four weeks.”
Leeb also added:
“Everything I’m looking at tells me to buy gold. I don’t see another way
out of it. What I find interesting about today, when I see junior gold’s up and
I see gold down 1%, that to me is a pretty meaningful divergence..."
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