On the heels of continued chaos in global markets, today acclaimed money manager Stephen Leeb told King World News there is outright panic and liquidation now taking place. Leeb also told KWN the Chinese are going to get extremely aggressive in the physical gold market because they believe the price is way too cheap.
Leeb: “I’m trying to focus on the reasons for the collapse, not only in gold and silver, but most of the stock markets across the globe. A lot of investors read Bernanke’s comments about ending QE, if certain economic conditions were achieved, as a reason to liquidate.
Investors firmly believe that the end of QE is like cutting the floor out from underneath the stock market. At the same time, China has decided to curb a lot of bad investments in their economy….
“There is hell to pay right now, but in the long-run I think this will be very good for China.
So when you combine what just happened with Bernanke and what is taking place in China, it has created a massive liquidation in global markets. People read China is imploding and Bernanke is going to taper back on QE and now you’ve got a full-fledged panic going on.
In this environment gold stocks have been absolutely destroyed. What we are seeing in that sector is total capitulation. But gold is now starting to hold up better than bonds and stocks. This is a sign that people aren’t fleeing into the US dollar necessarily, but into things they believe will hold value longer-term, and right now one of those assets is gold.