What do you see as the most serious “bubble” facing world economies and how could the gold market be impacted?
Announcer: What do you see as the most serious "bubble" facing world economies and how could the gold market be impacted?
Robert Wiedemer: I talked about China being really the biggest "bubble," I think, of all the economies right now, because the government stimulus going into China is just massive. It's in the form of bank loans that is given out to companies to build, frankly, factories that aren't used that well. Certainly, lots of empty buildings, shopping center, so forth, it's a massive money printing machine. That's really where a lot of the money comes from is the Central Banks. The government prints it, gives it to the banks, and they lend it out. It does boost their economy, but it creates a huge "bubble." You combine that with the fact that China also has a long time history of liking gold. Asia has liked it, India, the Middle East, always have enjoyed gold. It makes it the perfect anecdote for what, I think, will be coming a huge amount of Chinese inflation and ultimately a big pop in their real estate "bubbles", stock "bubbles" and other things. We've even seen a little bit of that already in stock "bubbles" popping, real estate "bubbles" popping in smaller cities. I think, we'll see it in big cities over time. Bottom line, the fact is that these people are much more gold oriented than the U.S. is or anything like that. We've actually had a much more stable financial system. People haven't needed it quite as much. Although, gold was mostly what we used in the 1800's as a currency, but China is much different. They are much more focused on it. It's going to be very, very important for the gold market. So when you're looking at the gold market, you've got to look overseas, not just in the U.S, and you've got to look at the "bubbles" overseas. As I've said we're not the only guys with a printing machine, money printing machine, other countries do it too.