With global markets recenty on a tear, today one of the greats in the business sent King World News a powerful piece warning that people need to get prepared for one of the most spectacular financial disasters in history.  He also discussed exactly what he is doing with his own money ahead of the coming chaos.

KWN Fleckenstein V 3:4:2015

By Bill Fleckenstein President Of Fleckenstein Capital

March 4 (King World News) – Despite the hoopla here in America over the Nasdaq reaching 5,000 again, the rest of the world ignored that monumental "milestone" with overnight stock markets nearly all a bit lower. Even more unusual was the fact that nearly all the bond markets declined as well. I don’t want to make too much of one night, but I found the development moderately interesting (I am especially focused on the action of JGBs).

As for stocks here, they were weaker after yesterday's first-of-the-month jam job to achieve the aforementioned Nasdaq big round number, and through midday they had lost about 1% before an afternoon rally trimmed the losses to the 0.5% or so you see in the box scores.

KWN Fleckenstein XI 3:4:2015

Lesson In How Long Markets Can Remain "Insane"

Despite all of that backstory, there isn't really any point discussing the action because it is the same as it has been, with the stock bulls pretending that the Fed will be able to raise rates and the stock market will continue to go higher for whatever reasons they deem worthy. That won't turn out to be the case, but those like me who have suggested the market couldn't sustain itself without QE are getting yet another lesson in how long things can remain "insane."

KWN Fleckenstein XII 3:4:2015

Tug-Of-War In Gold And Silver

Away from stocks, green paper was a bit weaker, fixed income was as well (notably, stock weakness didn't help bonds), oil gained a percent, and the metals were lower after seeing pretty intense two-way volatility. Initially, gold dropped $10 only to rally back to up $10, then gave up its gains in New York trading. Silver followed the same pattern, and by day's end gold had a small loss while silver fell 1%. I don't know what — if anything — there is to make out of all that motion.

King World News Fleckenstein 3:4:2015

Nasdaq 5000 – WARNING: Incredibly Intense Speculation

In terms of the stock market, I noticed that the Wall Street Journal bent over backwards to suggest that with the Nasdaq now back to 5,000, we won't see a replay of what happened last time, with their argument sort of hinging on the fact that valuations aren't quite as extreme as they were then. Having said that, they are still extreme, and speculation is incredibly intense. If today's crop of venture stocks were public, as they would have been back in 2000, and part of a capitalization-weighted index, P/E ratios would be much higher than they currently are.

King World News Fleckenstein VII 3:4:2015

Mania Fueled By Free Money – But Financial Disaster Is Coming

Said differently, this mania is not exactly the same as the 1999-2000 version, but it is a mania nonetheless, fueled by free money and huge increases in corporate and government debt, which intensify the risks once the bubble bursts but, regrettably, don't tell us anything about the timing. So everyone who thinks they are safe because things are so much better is going to find out that, while this time is different, the ultimate outcome is still going to be quite painful.

KWN Fleckenstein IX 3:4:2015

Risks Incredibly High – What I'm Doing With My Own Money

The fact of the matter is that the risks are as high, if not higher, than they have ever been, even if the absolute downside might be slightly less (maybe). In any case, I added to my VXX position today and bought puts on Intel, as I think that company is very vulnerable to losing at beat-the-number this quarter. I also plan to buy other PC-oriented puts as events develop. (I also bought puts on Oracle.) Positions in stocks mentioned: long VXX, long INTC puts, long ORCL puts. *** To subscribe to Bill Fleckenstein's fascinating Daily Thoughts CLICK HERE.

***ALSO JUST RELEASED: Russia, Berkshire And How Warren Buffett Just Shocked The World CLICK HERE.

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If you are interested in purchasing physical gold and silver for delivery you can call Steve Quayle or his staff at (406)586-4842, or you can email them at [email protected]

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Eric King
KingWorldNews.com