$15,000 Gold as Bull Market Pace Accelerates

kingworldnews.com

With continued volatility in the gold and silver markets, today King World News interviewed acclaimed money manager Stephen Leeb. When asked what he sees happening, Leeb responded, “The talk about letting inflation rise is gaining momentum and is seeping through the cracks in the Federal Reserve. That is an extraordinary sign for gold. If the Fed really does come to the conclusion that fighting unemployment is more important than inflation, for the short-term, I think that you are into the second part of the gold bull market which should be even more dynamic than the first.”

Stephen Leeb continues:

“We’ve had some clues. I have spoken recently about Evans, from the Chicago Fed, who said explicitly, ‘The Fed should stop targeting inflation in the short-term and start targeting unemployment. More interesting is the fact that Fisher, who heads the Dallas Federal Reserve Bank and has been one of the three dissenters in the last two FOMC meetings, he’s been very much in favor of inflation fighting in the past.

He (Fisher) commented recently that, ‘Inequality in the United States had been increasing recently.’ What’s intriguing to me is that the only time in recent history in which inequalities have lessoned in the country has been in the 1970’s when we did have inflation. I think the Fed is coming to the conclusion that this whole thing of defending 2% inflation is really ridiculous and is inconsistent with ever getting unemployment down.

History shows that after every war, from the Civil War to the Vietnam War, inflation spikes and often spikes to over 20%. My bottom line is we’re getting closer and closer to the point where the Fed says we are going to have to tolerate more inflation. When that point comes you will definitely see the next leg of this bull market in gold....

“Since the last ten or eleven years have already seen a lot of upside for gold, this next ten or eleven years in which inflation does take off in a big way will make the decade look very, very tame. I’m talking about this accelerating into the next leg for gold and silver over the next three to six months.

This is simple, once inflation is out of the bag, once the Fed is saying forget about 2 %, either implicitly or explicitly, you will see velocity of money and everything else take off. But more importantly you will really see the precious metals take off to the upside.

At that point you will see your three digit price in silver and gold is going to go much, much higher once inflation takes off at an accelerated pace. I think you will see a manic phase later on with $10,000 gold, $12,000 gold, $15,000 gold, pick a number, because with inflation in the drivers seat you will certainly see a repeat of what you saw in the 70’s.

Here is an interesting fact, gold bottomed almost exactly when inflation bottomed in the 70’s. In 1976 the CPI hit 4% and then the CPI went into double digits. When that was happening to inflation gold went up over eight fold in price. If you take the recent low and multiply over eight fold you are talking well over $12,000 for the price of gold. We are about to head into the inflationary phase and that phase alone will create an extraordinarily huge move for the price of gold.”