With continued uncertainty in global markets, today King World News shares a Q&A from one of the greats in the business.
Included below are five questions and answers from today’s Q&A with Bill Fleckenstein. The questions are from his subscribers and they get to read Fleckenstein’s answers every day.
Question: Golly, a country can have good deflation: “Switzerland is seeing steady economic growth and low jobless rate despite deflation.” – WSJ 10/18/2015
Maybe many more economists and money managers will soon realize this.
Answer from Fleck: “When they say deflation, they mean depression. The term has been so bastardized it is ridiculous.“
Question: Hi Bill, just a comment from the “no inflation” world I live in. I have Blue Cross-Blue Shield health insurance, and it’s a grandfathered plan. I just received my premium notice for next year. It’s going up 39.6%. Should I be happy I’m dong my part to help the country reach it’s 2% inflation goal?
Answer from Fleck: “Ouch. That is so maddening.“
Question: Grant’s (Jim Grant) also notes Chinese commercial bank assets foot 41% of worldwide GDP, which is larger than the previous record in 1985 when U.S. commercial banks’ hit 33%. Yet when I look at the S&P’s performance in the 1980s, it’s really good, even with the crash in 1987, from which the market proceeded to go right back up. So does this scary stat that seems to be further evidence that China is in a ponzi-scheme bubble really matter?
Answer from Fleck: “China is not a Ponzi scheme bubble, but they do have too much debt, and this transition from export/capex to consumer will be messy, if not chaotic.“
Question: QE 4 not coming anytime soon? Jim Grant reports in his Oct. 16th issue Bernanke believes the Fed would try negative interest rates or interest rate pegs before QE4. QE4 would be “at the end of the list.”
Answer from Fleck: “OK. Not gonna argue because if the stock market weakens the Fed will be chirping about NIRP soon enough.“
Question: Bill, does the recent action in the market (huge move upside in stocks despite terrible macro and earnings news, renewed faith in the central bankers, bad news = good news again, with gold acting kind of flattish through all of it) leave any path for a real bid in gold and the miners in the next 12 months or so? It seems like we are back in the nightmarish 2012-2014 loop again. How do we emerge from that now? Thanks very much.
Answer from Fleck: “The stock market will likely fail somewhere between here and the old highs. I wouldn’t get so dejected just yet.“
***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.
***ALSO JUST RELEASED: ALERT: Top Analyst Warns Gold, Oil, Stocks, Collar And Euro Are All Now Poised For Major Moves CLICK HERE.
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