China Is Going To Unleash The Gold Price Along With A New Monetary System

As we kickoff trading in the final week of May, one of the top money managers in the world said China is going to unleash the gold price along with a new monetary system.

China Will Send Gold Soaring
\ (King World News) – Dr. Stephen Leeb:  Investors who have long had a particular interest in gold are surely asking themselves: How does the pandemic that originated in China and swept through the world impact the outlook for the metal?

My assessment? It will only speed up what already was inevitable, i.e., China’s forward march in ways that will send gold soaring.

The pandemic will make it easier for China to broaden its already sizable lead over the West in all those characteristics that position an economy to define what a monetary reserve system should look like. And China, as I’ve been arguing, will use that edge to create a new monetary system that will likely be a basket of currencies but that certainly will be backed by gold.

$20,000 Gold
I’m still guessing that ultimately this will lift gold to $20,000 or so. But one lesson everyone should take away from this pandemic is humility. The world throws a lot of curve balls, and the world could change in any number of unforeseen ways. Still, the more unexpected changes, the more likely that gold will be the one investment that’s utterly essential to own.

One mystery as the pandemic has progressed has been why there has been such a dramatic difference in how it has impacted East and West. Whether from Kismet or some unknown malice, the West has been hammered while the East has been relatively unscathed. The U.S. no doubt could have handled the virus better. But any shortcomings in our response don’t seem nearly commensurate with the massive difference between East and West. And note it’s not just the U.S. that has been far harder hit than the East; so, has the entire West, spanning Eastern Europe to California…

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Billionaire Eric Sprott Buying
To find out which company billionaire Eric Sprott just bought a 12% stake in click here.

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A plausible possibility is that there were two strains of the virus. At last count, the developed democracies in the East – Australia, South Korea, Japan, etc. – had suffered about 1,700 deaths out of about 260 million people. The New York City metropolitan area, the epicenter in the U.S., which is where I live, has seen 26,000 deaths in a population of 19 million. And in Germany, a positive outlier in the West had nearly 5 times the number of deaths in the Easter democracies with less than 1/3^rd the population. These differentials beg for thorough exploration, though it’s possible we never will know for sure what accounts for it. 

The East’s easier time with the virus, whatever the explanation, has left it in better shape going forward. That is good reason to believe that economic growth is going to resume in the U.S., and likely strongly, because it’s the only shot we have to hold our own against China. History shows that growth even in the midst of a devastating virus is possible. In 1918 the Spanish flu, the worst pandemic in recent history, resulted in 675,000 U.S. deaths. Yet while that was happening, the economy grew at a 9% pace, thanks in large part to the war effort. 

Growing Hostility Towards China Over Pandemic
One very disturbing upshot of the pandemic is the growing hostility here towards China, which is becoming more evident daily. Focusing on China as our enemy, painting it as an existential threat to the U.S. will foster unity in the U.S. It could lead to a war-like effort to grow our economy – but at a horrid cost that would likely be self-defeating and which could abort all the ways in which the two countries could find areas of cooperation that could make the world a better, safer place. I don’t believe that China, with all its faults, is aiming for global hegemony. Working with China wherever possible seems a much better option than taking positions that ensure that China does indeed become our implacable foe.

For anyone who says, yes, but what about China’s human rights record, what about its treatment of Muslims, what about whatever, I won’t argue. There’s plenty to deplore. But that still shouldn’t make it impossible to find some common ground. Just consider that one of our strongest allies in the past half century has been Saudi Arabia, hardly a bastion of democracy, humanism, and freedom. Yet we seem to have no problem overlooking its flaws. You could say the same about a lot of other countries we work with.…..more here

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