The Bull Market In Commodities
Dr. Stephen Leeb, Ph.D
Tom Bodrovics welcomes Dr. Stephen Leeb to the Palisades Gold Radio Show. Stephen is a financial author, wealth manager, and investment newsletter publisher. His interest began to shift in 2000 towards gold when it was apparent that globally we were reaching a significant turning point.
Dr. Leeb discusses the gap between developed and emerging countries and how China’s growth has mainly driven that change. This gap has since closed significantly and continues to do so. This trend has resulted in a vast and growing demand for commodities. The developing world is now more massive than the developed world and is growing much faster.
He discusses the reasons why gold has value and why holding it is so important. Like many other commodities, gold has outperformed. We will need massive amounts of copper, iron ore, and silver for the emerging economies and electrification. Silver has some of the best properties of any metal, and it’s not at all clear where we are going to get more.
He expresses concerns about our dependency on rare earth metals and the risks of not having stockpiles. Today, the U.S. has little input in some major supply chains like semiconductors; thus, we are now entirely dependent on others’ kindness.
Stephen argues American ingenuity through companies like Bell Labs during the last century led to much of today’s prosperity. We have now lost our competitive edge, mainly due to Nixon ending the gold standard. Subsequently, we moved to an undisciplined economy that could spend without restriction.
He discusses what a new monetary system would likely look like and why it will be a digital currency basket backed by gold. China is currently testing digital currencies, and internally they are already on a de facto gold standard. In China, citizens are encouraged to buy gold, which they can do at most banks. Western central banks are just beginning to take notice and look into digital currencies.
Lastly, Stephen discusses where gold could head over the next twenty years. Bottom line commodities will continue to play a massive role globally, and investors should own some gold.
Time Stamp References:
0:00 – Intro
0:55 – Converting to a gold bug.
4:30 – Energing economies.
8:00 – Gold as a store of value.
12:00 – East vs. West recovery.
15:30 – Commodity reserves changing.
18:00 – Properties of silver.
20:30 – Semiconductors. gallium, and silicon.
24:00 – Commodity scarcity and energy return on investment.
25:00 – Rare earth concerns.
32:00 – American ingenuity last century.
35:00 – What went wrong, we left the gold standard.
43:00 – Commodities should be in your portfolio.
44:20 – Structure of a new monetary reserve system.
48:00 – Digital basket of currencies backed by gold.
50:30 – Fixing gold to a new digital currency structure.
53:00 – China’s real gold reserves and their mining.
57:00 – China has a defensive military structure.
58:30 – Ghost cities and China’s longer-term plans.
61:00 – Co-operation or isolation.
63:40 – Gold targets long-term.
69:30 – The other 85%.
72:00 – Buffett buying gold.
Talking Points From This Episode
- Emerging vs. the developed world.
- Commodity demand why it will increase.
- Critical metals and rare earth metals.
- China, digital currencies, and gold ownership.
Hi there… a shout out from London. Just finished the last chapter of China’s Rise… really recommend it to all the others out there because the book reveals much more than just investing in gold and china’s role, it’s really a foretelling of what is to come economically and if you are worried about your financial future and maybe shaky on what to invest in- this book is worth a million times more than the $20 I paid for it on Amazon Kindle. Cheers.
It’s amazing how so my financial advisors wont let you out of the market to buy gold or silver bullion. It makes sense tho- they only make money when they are in control of keeping all of your investment funds tied up in the stock market. I’ve been with Fidelity for a decade and after reading several of your recent articles, I’m a bit leery to continue to allow a total stranger to manage my portfolio. They don’t have any personal vested interest as to whether or not I make a return on my investment because they make money when the market is up and when the market is down. It’s almost sad that so many people just blindly follow the advice of financial professionals. In 2008, I lost $80,0000 out of my portfolio and with the way the world is going these days, I’m leaning much more towards physical assets like bullion than ever before.
Fascinating article!
I’ve continued to return to your site again and again for investment advice. The weekly emails you send out have really helped me make some advantageous moves in my portfolio 🙂
I was a bit leery to move away for total investment in ETFs but now I have diversified into silver bullion and taken some interest in the ETF stocks for some mining companies for various commodities that you have featured in your articles. Thank you for sharing your knowledge and I look forward to new articles every week!
After following some of your blog article topics, I’ve really changed my perception of what I need to do for diversification in my portfolio. I also very much appreciate the advice you mentioned not to follow the 60/40 advice of CFA because I was so heavy in stocks and after taking a hard look at my portfolio, I realized that my CFA was not actually working in my best interest. Perhaps others should think about this too. No one will care about your money as much as you do- because well, you earned the money and you want it to grow- hence the reason you have the money invested. I’ve moved into more commodity ETFs and I’m seriously considering gold bullion as I can afford to add it to my investment holdings.