With the dollar pulling back, today a legendary short seller answered the question, has he ever been 100% long gold and miners?
By Bill Fleckenstein President Of Fleckenstein Capital
March 10 (King World News) – The jobs data today was in line with previous estimates, if not a smidgen better, although given the ADP report on Wednesday folks may have been looking for even more jobs. Nonetheless, it was a “solid” (grading on the curve of the last eight years) if boring report…
To hear which legend just spoke with KWN about $8,000 gold and the coming mania in the
gold, silver, and mining shares markets CLICK HERE OR ON THE IMAGE BELOW.
The stock market was initially enthralled with the data, as the S&P 500 added over 0.5% in the first hour before giving up some of those gains. Over the course of the day the rally sort of fizzled and by day’s end it was reduced to roughly 0.3%.
Away from stocks, green paper was a bit weaker, as bullish expectations and positioning for folks to get long the dollar for all sorts of reasons suffered a small setback. Oil lost 2%, fixed income traded on both sides of unchanged, and the 10-year briefly pierced 2.60% before it rallied to close slightly higher (in price). As for the metals, they were initially weaker prior to the NFP report but they rallied to close slightly higher. The miners were higher and look to me like maybe they have “turned.”
Included below are two questions and answers from the Q&A’s with Bill Fleckenstein.
Question: Big Deal, a 1/4% rate increase is what I hear from mouths of fools half my age. Even mentioning 1/2% gets yawns. Now, Bill these are (mostly guys) who are leveraged to the max on stocks, and re-leverage as the stock go higher (great logic boys and girls). These folks do not see rate increases as any issue what-so-ever. They are also fairly leveraged on credit cards too….”minimum payment required” is a great way to get ahead, I had one say confident that his job is here tomorrow (and his employer has customers…tech by the way). I thought to myself, this is exactly what companies are doing. The FED inflates assets to try to out pace the rising debt levels that government, companies and ‘children-of-the market’ are creating. It is not inflation (we have that), it is not jobs ( that is not happening when you clear away the smoke), so I must conclude it is debt that they are trying to out run. Albert Edwards reminded us today of 1994 and what happened to Orange County and the entire bond market when Greenspan hiked when he shouldn’t have. The ice is a lot thinner now to be tossing the weight of a rate hike out, unless, of course, you want the house of cards to fall.
Answer from Fleck: “Just so you know, it is wrong to say Greenspan hiked when he shouldn’t have – that is not true. The problem was the wild speculation his prior easing caused, but that was nothing by today’s standards.”
100% Gold & Miners?
Question: Could you ever foresee yourself having a 100% position in gold and gold miners? Thanks.
Answer from Fleck: “Yes, I have in fact. But you have to be very, very careful about managing risk. It is not something most people should try to do, IMO.”
***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.
KWN has now released the remarkable audio interview with legendary James Dines and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: James Dines Just Warned We Are Headed For A Global Crisis As Government Bonds Are Going To Crash CLICK HERE.
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