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Fleckenstein - Gold & Insane Central Banks Printing Trillions
Today Bill Fleckenstein told King World News, “I think that we are in a new era, a new regime, in terms of how reckless these central banks are willing to be.” Fleckenstein, who is President of Fleckenstein Capital, also stated, “So we have these out of control central banks, and I think it shocked people that Bernanke was willing to go as far as he was.”
Fleckenstein also discussed gold, but first, here is what he had to say about reckless central banks: “It should be obvious you can’t run a printing press to finance government debts, and it is obvious, but yet they are getting away with it. It is not clear as to when this will end or what will be the catalyst to make it end?”
© 2012 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 This material may not be published, broadcast,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.
October 12, 2012
Bill Fleckenstein continues:
“I had thought that once people stopped fearing a deflationary financial collapse in Europe, then they would say, ‘Well wait a second, if we’re not going to have a deflationary collapse, and they are going to print all of this money, and they are making the money worth less all the time, it’s going to be inflationary.’
‘If I’m not afraid of just getting my money back. I want more of a return on it, therefore I am going to demand more.’ But we haven’t hit that point yet....
Continue reading the Bill Fleckenstein interview below...
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“So yes, you are right, central banks are buying the very debt that needs to eventually discipline them, but they will get away with it until the world psychology changes, and the world’s bond market psychology changes. I don’t know how long that will be.
We have the insanity of these central banks printing trillions and trillions of dollars to buy mortgages and government debts. It’s the same kind of insanity, but it’s a little more behind the scenes. If you are a normal person, you could kind of see the equity bubble, and you could see the housing bubble, but to understand about all of this stuff, they might not see it.
I mean there should be plenty of adults operating in the financial markets, but right now people would rather get a negative rate of return short-dated government paper than just about anything else. So it’s just the madness of crowds going in a different place.”
Fleckenstein had this to say regarding gold: “We find these spots along the way where the market seems unable to get through it for whatever reason. There’s a seller there, or a lot of out of the money options may have been bought and there is a strike price that allows dealers to shoot against that strike price because of some derivative exposure they have.
So we have gotten stuck just below $1,800. It’s a price the market failed at before, so I guess there is a reason to see where there would be a speculative battle line that would get drawn. But I think it will be hard for the market to spend a lot of time below say $1,750 or $1,740, which is where Bernanke basically told you that they are going to print money until the unemployment rate is 6%.
I think that we are in a new era, a new regime, in terms of how reckless these central banks are willing to be. So we have these out of control central banks, and I think it shocked people that Bernanke was willing to go as far as he was. So it seems to me the market is not going to spend a lot of time below that price ($1,800) because I think there are people that would have bought the (gold) market that day if it hadn’t run away.
My feeling is there are buyers below the market. So if we are in the middle of another correction, and it has a little more to go, I don’t think there is a lot of downside, but we’ll find out.”
© 2012 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.
The above portion covering gold was just a snippet of what Fleckenstein had to say about that market. He spends a great deal of time in this interview covering the gold market, and he also covers Europe, global policymakers, their policies, and what KWN listeners should expect going forward in key markets. The tremendous audio interview with Bill Fleckenstein is available now and you can listen to it by CLICKING HERE.
The interviews with Art Cashin (UBS $612 billion), Jeffrey Saut (R.J. $360 billion), John Embry, Gerald Celente, Rick Santelli, Michael Pento and Don Coxe are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included, Pierre Lassonde, Rick Rule, Nigel Farage and Ben Davies by CLICKING HERE.
Eric King
