Often wrong, never in doubt. – Bill Fleckenstein

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Fleck's Thoughts

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Q: Bill,
In response to the readers' queries about all the electricity used in Bitcoin mining, I invite you all to have a look at this post the other day from Charles Hugh Smith Did Anyone Do Even a Minimal Check on the Sensationalist Bitcoin Electrical Consumption Story?
It puts things in perspective, I think.

Q: Hello Bill

I know you have been warning about all this rally will end badly like last 2 times but no one seems to care much. But here is interesting article by ECRI

Next Global Growth Downturn Will Blindside Most

While everyone seems to be confident about great recession of 2007 over and we might even see improved economy in US due to tax cuts and infrastructure spending as well as other economies due to lower rates, etc something is going to catch everyone by surprise.

I have been following ECRI for long time. While they can't predict stk mkt behavior I think their directional approach where the economy may be heading is accurate. So if this is their true warning then I think lot of people are going to get caught off guard. I don't think their views about US economy are changing much due to tax cuts, etc. They still think this is as good as it gets. They are not predicting outright slowdown or recession yet but looks like their warning should be taken more seriously.

Thanks and regards

Q: Ugh......are you concerned PAAS made a new 52 low today ($13.99)?

Ps......not whining

Q: Is it time for us to acknowledge that the bitcoin mania is now affecting the price of gold? The markets are moving in almost perfectly inversely now. Maybe that's a good thing if we're nearing the end of the mania, but seems like it's hard to argue otherwise at this point.

Q: Is it possible that all the economic rules we live by are obsolete? How do we get on the winning side? Bitcoin vs gold actually impacted my golf game today! Enough! LOL

Q: Fleck

Just an observation. Seems there is a massive contradiction in bitcoin. It wants to be viewed as a currency. Indeed, the future hyped "value" of the currency seems to be based on a network effect -- ie that it will be used more and more and more to transact financial exchanges.

However buyers are buying NOT to use as a unit of exchange, but because they think its going to a million, in other words that the value is going to go up and up. So the buyers (and sellers) are using the entire thing to speculate. That's fine I suppose (although for some it may end in tears), but what it ISN'T is a medium of exchange. Which is supposedly its whole reason for being valuable ini the first place!

So if bitcoin is being used to speculate, that is completely contrary to using it is a unit of eachange. Who on earth would use something to buy a cup of coffee or a car or anything else that they think is going to be worth ten or a hundred times more in a year? So much for the "network effect."

Q: Bill,
How much attention do you place on the percentage of shorts in the float of a stock when considering buying a put option?
Thank you.

Q: Deflation watch update:
1) McDonald’s Sausage McMuffin just increased by 7.7%
2) BlueCross BlueShield just notified me that my monthly health insurance premium is increasing by 11.9% in February - - and completely unrelated to my very rare sausage mcmuffin consumption :)

Q: Cramer is pretty bullish on the market, is he totally wrong?

Q: Hello Bill,
Is it possible to add Bitcoin in the data box on the Daily Rap page?
This is a fine example in speculative mania at its best and the study is in real time.

Q: In the recent fall in gold the futures positioning change was interesting. Open interest fell which happens in falling prices. Interestingly the large speculators long position total interest did not fall. It was steady to higher. What fell was the large speculators spread positions. This tells me that large speculators are maintaining their longer term bullish bias. It is just that they have given up on gold for the near term. We of course have no idea what the duration or strike pricesof these spreads were.

My question is that do you find this kind of analysis useful and do you agree with this analysis?

Q: Do you think the central bank and government losing control of the bond market will have to be a accompanied by wide lose of trust in government and it's institutions in the eyes of the public?

Q: Dear Fleck,
As I’m still hanging out on your site and love it even though I love and work in bitcoin, I thought i’d poke my nose in and offer a more detailed answer to why bitcoin needs tones of electricity-
bitcoins “proof-of-work” system needs the Miners that make the distributed data-base that is called a blockchain to burn electricity with their computer processors so that we don’t need to trust them- if they screw with the block-chain they won’t be able to pay their electric bill as they are paid by the system in bitcoin coins only.
This is the economical incentive trick that makes bitcoin work as a world wide open network in which you don’t need to trust a third party to keep the ledger.
This dose not counter the fact that the speculation is crazy.
Thank you for the opportunity,
anti-fiat bitcoin wierdo

Q: Hey, Bill,
When do you think we will see editorial in The Economist/Barrons/WSJ "The 10 year Coin that killed the 5000 year Gold"?
a) this weekend
b) this month
c) next month
Picture this David with BTC as face and Goliath with gold bar as head.

Q: My chiropractor friend is now a bitcoin dealer(whatever that means). he is now soliciting all his patients to purchase it through him. He said Warren Buffett is buying it so it has to be good and it is going to $45,000 so not to worry.

Q: Here we go again with the same old painful pre-Fed bashing of gold. Market mavens talk for 60 days about the "inevitable" December rate hike. You think it's in the market. But for some reason, every time, the "news" is greeted as a big surprise. Only happens in the gold market.