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Dr. Stephen Leeb: The New Monetary Reserve System

Tom Welcomes Dr. Stephen Leeb, financial author, wealth manager, and newsletter publisher, to the show. 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.

Guest Links:

Dr. Stephen Leeb is a recognized authority on the stock market, macroeconomic trends, and commodities, especially oil and precious metals. As Chairman and Chief Investment Officer of Leeb Capital Management, Dr. Leeb combines his knowledge of macro-economic trends and current market conditions with detailed information about specific companies he follows to guide the Committee’s investment decisions.

Stephen Leeb is a financial author, wealth manager, and publisher of a family of investment newsletters. He has been a recurring guest on CNN, Fox News, NPR, Bloomberg, and many others through the years. Leeb was also said to be one of the country’s foremost financial experts, with Charlie Gasparino in 2016 recommending Leeb as a good candidate for Federal Reserve Chairman.

Leeb earned a B.S. in Economics from the Wharton School of Business. He also earned a Masters in Mathematics and a Ph.D. in Psychology from the University of Illinois. He authored research papers on psychology and statistics in the peer-reviewed journal Psychological Reports. Stephen Leeb is married and lives in New York City, New York.

Leeb has written nine books on macroeconomic trends, finance, and investment, including the New York Times Best Sellers. Stephen’s recent book Red Alert was awarded the 2012 Axiom Business Book Awards silver medal in the International Business/Globalization category.

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