China, Russia, Gold & A New World Order Rising From The East

kingworldnews.com

Today an acclaimed money manager spoke with King World News about China, Russia, gold, and a New World Order that is rising in the East.  Stephen Leeb also spoke about how the Russians and the Chinese are planning to set up this new hub of power in the East.

Leeb:  “I am watching what is developing between China and Russia.  They have a shared desire to establish a region that is completely independent of the West.  China has had a persistent focus on gold....

“Recently the Free Trade Zone in Shanghai has opened futures trading and expects to be the world’s hub in terms of gold trading.  But, Eric, these trades aren’t going to be denominated in dollars.  These trades are going to be denominated in yuan.

Because the trades are going to be denominated in yuan this means there is going to be a real-time way of relating yuan to gold.  In the not-too-distant future it will be almost de facto that gold is backing the yuan.  So this is the first substantive step in establishing the yuan, and perhaps another basket of currencies, like the ruble, mark, etc, as being part of a new reserve currency.

In today’s world, I continue to believe that any long-lasting reserve currency is going to have to have gold backing.  Remember, Eric, the Golden Age in the United States was post-World War II.  During the period between 1946 and the early 1970s the U.S. was still on a gold standard.

I now think the East is putting together some sort of version of what the U.S. had during that remarkable time period.  You can just imagine that as the Chinese and Russian militaries get a little bit larger, and as Saudi Arabia doesn’t know where to turn, the Chinese may look at this as an opportunity to see oil denominated in yuan instead of dollars.  This may be what Saudi Arabia is more comfortable with as well, especially after all of the destabilization which has been taking place in the Middle East. 

So a lot of the things that are going on suggest the whole Eastern part of the world is ready for something new.  America really can’t stretch its military presence around the world indefinitely, and I think it’s clear that the combination of the Russian military and the Chinese military is certainly a match for the U.S. in that part of the world.  So I think they can guarantee the Saudis security much better than the United States can.

If you look at Iran, who controls it, Russia or the U.S.?  Remember that the Russians built Iran’s nuclear plants.  We didn’t.  Also, Iran has been off the radar screen and yet they are building a nuclear bomb.

But coming back to China and gold, their imports of gold have been somewhere around 1,200 tons this year.  At a certain point the Chinese are going to have more gold than we had at the end of Bretton Woods.  So this move to a new world currency is now unfolding.”

Leeb also added:  “I just want to share a story from Bloomberg that shows how brainwashed our news media is in the West.  The story was basically saying that the Russian economy may really be hurt over the next 3 years because there is no solution to this Ukraine crisis.  So essentially Russia has to buckle down and be prepared for 3 years of suffering.

Well, Russia went through 10 years of suffering at the end of the Cold War and conditions were so bad that life expectancy dropped.  So Russia can go through that kind of suffering.  But if Russia is going to go through 3 years of suffering, guess what?  The Ukrainians are going to go through Purgatory and probably won’t survive.

Whatever suffering happens to Russia, you can multiply it by ten and you will see what’s going to happen to the Ukraine.  This will also tell you what is going to happen to the Baltic States.  And who knows what other parts of Europe are going to be affected?

So the message here is not so much that Russia is going to suffer -- they will suffer some -- but what people should infer from this is that Russia is prepared to drag this out for 3 years.  And if they do, there will probably be no more Ukraine, and probably no more Baltic States.  So this will end in a massive victory for Russia and the East.

This is all part of a massive shift of power from West to East.  So I think the move to trade gold in yuan is the first step in a New World Order in which monetary policies will come from the East.  Investors should get ready for this by owning gold.  Gold may drift for a short period of time, but over time this buying opportunity in gold will look like the Dow Jones in 1982.  That 1982 buying opportunity was the greatest buying opportunity for stocks in my lifetime, and I think this current opportunity in gold will be seen as something similar.”