Steven Leeb: Gold is now the defacto world currency

This is a very interesting video of a discussion between Peter Schiff and Steven Leeb on the Lou Dobbs show. They are discussing the latest economic chaos and the drops in the stock market and subsequent climbs in the price of gold. Peter Schiff is funny, this guy is the king of soundbytes. He says that "What we`re experiencing now is the hangover from the last round of monetary stimulus". The overspending, the borrowing, the printing of dollars that debase the US currency, have all taken their toll on the American economy. Another brilliant Schiff soundbyte is "Rather than letting the economy check into rehab, they`re shooting it up with more drugs, and we`re gonna overdose!" He says this in reference to the low interest rates intended to keep stimulating and pumping up the economy, and the lack of willingness to let the economy`s assets naturally redistribute themselves.

Steven Leeb made an impressive comment and one that has special interest to this blog. Leeb said that "Gold is now the defacto reserve currency," citing gold`s dramatic rise in price to nearly $1800 and people`s increasing trust in the integrity of gold over the integrity of the dollar.

Peter Schiff disagreed and said that the dollar doesn`t deserve to be the reserve currency anymore but that it still is because central banks are only just starting to buy gold, and because countries around the world continue to buy US dollars to prevent its collapse. Japan alone bought $50 billion US dollars last week. Japan, China, and other countries continue to do this to keep the US dollar from falling too far, so that they can continue to export to the US. Eventually this cycle will break down, but for now the dollar is being artificially resuscitated.

In any case, both agree that the future looks grim for the US economy and that the future looks bright for gold. As Peter Schiff says in the video, "You better have some gold".