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Fleckenstein - Gold & Silver Bottomed, Expect Money Printing
With gold down over $30 and silver falling more than $1.50, today King World News interviewed Bill Fleckenstein, President of Fleckenstein Capital, to get his take on the situation. When asked if we have already seen the lows in the metals and where we are headed from here, Fleckenstein responded, “People need to be aware that, unfortunately, silver’s personality is such that it can do what it just did. Now having said that, a drop of 30% in a handful of days is extraordinary even by silver standards. Obviously gold held up little bit better than most commodities, but (in general) they were annihilated.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
September 28, 2011
Bill Fleckenstein continues:
“There was a fair amount of hot money in these things, which in hindsight is not surprising because gold, silver, platinum and copper, that group of commodities, were about the only thing that worked this year. People were using leverage, that’s what the decline tells me. So we have washed out a huge contingent of speculative operators. Thus, the markets should be ‘clean.’
It (gold) will probably take some time to repair itself. There will be a lot of back and forth, that sort of thing, but I expect the lows that we hit won’t be violated and we should start working our way higher (from these levels). The ECB is going to print a ton of money or the euro is going to fracture. Either one of those resolutions will be bullish for gold.
If you assume that nothing has changed, when you have these selloffs, they kind of clear the air. I mean you chase out a lot of hot money, you’ve chased away leveraged money and obviously you’ve chased out buyers.
At some point, the Fed is going to have to come with something else because what they are doing is not going to be good enough for what they are looking to accomplish. So I don’t think anything has changed all that much. The market will simply take time to repair itself and then it will go back to doing what it was doing before....
Continue reading the Bill Fleckenstein interview below...
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“The same people who have been seeing deflation for twenty years think that because gold, silver and copper corrected, now they think we’re going to have deflation. Of course those commodities have declined many, many times in the last four or five years and we don’t have deflation. If you think about someone’s paycheck, in all of the variable costs, medical, tuition, services, garbage collection, anything else, we are having inflation.
The cancer that is Europe and the European banking system continues. They don’t understand how to play the game that they have brought themselves into and so they are going to flail until somehow the market forces them to either print money to kick the can down the road or implode.”
When asked about the mining shares specifically, Fleckenstein responded, “The idea that they were ‘Gold, only worse,’ that’s behind us. Now they are becoming gold, only better. Unfortunately they had started to do better and then they got slaughtered with the decline, but I think on the next leg up in the metals, the mining shares will do quite well.”
We have increased coverage due to the weakness in the metals, so the KWN interview with Bill Fleckenstein is available now and you can listen to it by CLICKING HERE.
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
