As The Fantasy Dies, Panic Will Ensue & Gold Will Soar
Today Bill Fleckenstein warned King World News that “as the fantasy dies,” panic will ensue and gold will soar. Fleckenstein also predicted that the staggering 24% unemployment in the United States will get much worse in the future as people realize the Fed is trapped and the great unwind finally begins. Below is what Fleckenstein, who is President of Fleckenstein Capital, had to say in this powerful interview.
The
purest reading of the market’s response to what the Fed does would be if
the Fed doesn’t taper, and then the bond market really doesn’t go very
far and shortly starts to sink again. Then, what will people say?
Here is a small portion of what Fleckenstein had to say regarding gold and silver: “Americans
see no need to own it (gold). We’ve got massive debasement going on
around the world. All of your listeners (and readers) understand the
bull case for the metals.
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Today Bill Fleckenstein warned King World News that “as the fantasy dies,” panic will ensue and gold will soar. Fleckenstein also predicted that the staggering 24% unemployment in the United States will get much worse in the future as people realize the Fed is trapped and the great unwind finally begins. Below is what Fleckenstein, who is President of Fleckenstein Capital, had to say in this powerful interview.
Eric King: “How will the economy handle higher interest rates in the long-run?”
Fleckenstein: “It’s
not going to handle it. That’s why if the Fed tapers and the bonds
start acting funny, they will end tapering because they will start
thinking, ‘Geez, we can’t have this happen.’ Then, more people will see
that the Fed is trapped.
“They will only be able to draw one conclusion -- that is the fact that the Fed has overdone it.
Now,
not everyone will conclude that and they won’t conclude it right away.
And the Fed will fight that, and they will keep printing, but we will be
on our way to the 1970s. Maybe people will start to look at the
stagflationary environment that we actually have, the horrendous job
growth, weak GDP, and inflation that’s probably twice as high as
whatever real GDP is, and it will be seen as stagflation, and that will
have consequences.
But
right now, people continue to believe that the same idiots that created
all of these problems, namely the central banks, are going to somehow
get us out of it with the exact same policies that got us into it, only
at a much higher (aggressive) level of pursuing those policies.
We’ve
had so much artificial stimulus, and we’ve misallocated so much
capital. And over the couple of decades we’ve been doing this we’ve
kind of broken the economy and the financial system. So, I don’t think
you can worry about what’s on the other side. We haven’t even gotten
people to understand the charade that we have.
What
the masses have done over and over again is to believe one more time
that it’s all going to be OK ... We are in a unique moment in history.
The whole world is printing confetti, and (yet) people seem to think
that’s going to work out fine.”
Eric King: “John Williams
says that the real unemployment in near (a staggering) 24% in the US.
Bill, when the fantasy ends, is it going to get (even) worse?”
Fleckenstein: “Of
course. The longer you keep pursuing insane policies, the more you
pile (them) on top of each other, the worse it gets ... So, when the Fed
can’t print money and we have to deal with this, it’s going to be
brutal.”
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