Stronger yuan will cheapen commodities for China: Leeb

Renowned investment guru Stephen Leeb says China is pushing for a stronger yuan in order to cut the cost of its commodities purchases.

In an interview with King World News Leeb said that the East Asian superpower is in the process of strengthening the renminbi in order to reduce commodity prices relative to its official currency.

What the Chinese are also doing is they are starting to rely on a strong yuan because they want to get the price of commodities down (in terms of price for China). They can get them down by creating a much stronger currency, and they are doing that.

His conclusion stands in stark contrast to the standard criticisms of China's monetary policy over the past decade.

China has continually drawn fire from overseas detractors for its refusal to float the renminbi or permit it to appreciate. Critics such as Paul Krugman claim that China's distortion of the exchange rate confers it with an unfair trade advantage and act as a subsidy for exporters.

Leeb also believes China is "very bullish for gold" and that even if prices slide to the $1,700 level the precious metal is still "really going to take off" at some point in the near future.