Leeb – This is Why World Markets are Incredibly Unstable
May 14, 2012
With a sea of red across virtually all markets, today King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. Leeb told KWN that global financial markets are in an extraordinarily unstable situation. Leeb also said investors should expect to see more “tumutuous events” ahead. But first, here is what Leeb had to say about the derivatives crisis the world faces today: “When you start talking about quadrillions (of dollars), you are talking about numbers that are 1,000 times larger than $1 trillion. GDP is measured in trillions, and when you start talking quadrillions, you are talking about numbers that dwarf worldwide GDP.”
Stephen Leeb continues:
“So, of course it’s extraordinarily destabilizing. Importantly, it’s beyond any human being to understand all of the interrelationships between all of these paper derivatives various entities possess. Everything is hedging everything else and it becomes so complex that there is virtually no easy way out. When you hear numbers like quadrillions, it’s so detached, relative to the size of the world’s economy.
We are in a real mess and it cannot be sorted out in any meaningful way. It’s a matter of when people wake up and start fleeing towards gold. I assure you that five years from now, when you look at this period (in gold), it won’t look like anything on the chart. But living through this kind of pain is very difficult because you see how it’s going to work out, but you don’t see the exact timing….