Bill Fleckenstein of Fleckenstein Capital has a difficult time seeing other assets to own besides the precious metals. There are confidence bubbles in stocks, bonds and the fiat currencies that will break -- not may, but will -- and when they do, he sees no safe harbor for investment capital save gold:
If you saw the stock bubble coming in the late 1990s, why did you see that? Because you could see what the Fed was doing and the response people were having and the misallocation of capital and all the problems that that was going to lead to. If you saw that coming, you could not buy stocks. Your only real choice was to do nothing or short stocks. Shorting stocks is tricky, but those were the responses.
Fast forward to 2008; if you saw an even worse and more problematic real estate bubble, again, you could buy stocks or you could short them. You could not buy real estate if it was difficult to short list it. What were the proper responses?
Well, in the interim of those two, you also could have the response to buy gold, because we knew what the central banks' response was going to be.
Now here we are today. If you understood those problems, you cannot buy stocks, because they are only up because of money printing. You cannot really short them, because it is so hard to fight that money printing. ...
Now the gold market has been under pressure for like 18 months, and we had a huge break off the top in September of 2011 when Bernanke did not do QE2 when they thought he would. Now we just had an immense crack after having had, for a year and a half, central banks go hog wild. I cannot believe that there is not going to be an enormous rally, prospectively, in the gold market, once it stabilizes and starts flying higher. It is going to go one hell of a lot higher, I think.
If you saw the stock bubble coming in the late 1990s, why did you see that? Because you could see what the Fed was doing and the response people were having and the misallocation of capital and all the problems that that was going to lead to. If you saw that coming, you could not buy stocks. Your only real choice was to do nothing or short stocks. Shorting stocks is tricky, but those were the responses.
Fast forward to 2008; if you saw an even worse and more problematic real estate bubble, again, you could buy stocks or you could short them. You could not buy real estate if it was difficult to short list it. What were the proper responses?
Well, in the interim of those two, you also could have the response to buy gold, because we knew what the central banks' response was going to be.
Now here we are today. If you understood those problems, you cannot buy stocks, because they are only up because of money printing. You cannot really short them, because it is so hard to fight that money printing. ...
Now the gold market has been under pressure for like 18 months, and we had a huge break off the top in September of 2011 when Bernanke did not do QE2 when they thought he would. Now we just had an immense crack after having had, for a year and a half, central banks go hog wild. I cannot believe that there is not going to be an enormous rally, prospectively, in the gold market, once it stabilizes and starts flying higher. It is going to go one hell of a lot higher, I think.
More information can be found online at http://www.goldbullionadvisors.com
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