Often wrong, never in doubt. – Bill Fleckenstein

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Fleck's Thoughts

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Q: Great 1/31 rap, thank you, your experience is invaluable!

Q: ...having Joe Rogan and Neil Young move a $35 billion stock by 11% is like having Homer Simpson and The Banana Splits move a stock by over $3 billion...we must be near the end of the current insanity...

Q: So I get that you "hate those ETFs, they are full of loads of garbage.", {1/28/22 AF} referring to GDX & GDXJ. Have you ever considered creating your own unofficial index of your top 8 to X names? You can call it the: Gold Fleck Index ==> GFLKX

Q: Hi Bill, have you heard any updates regarding the Escobal pre-consultation process? It seems like they were making good progress in September or thereabouts. Did the recent Covid surge in Guatemala delay the meetings again? Thanks in advance.

Q: "High" finance runs on the spread between short and long term rates. And don't forget the leverage that goes with it. Right now, 2 year/ 10 year spread continues to grind lower. What I have learned in this business is that assets are priced on the margin. Right now, the life blood of the system, spreads, are going in the wrong direction. For all the fun and games, the market is a one factor model. And that factor is the shape of the yield curve.

Q: Bill:
All of the PM true believers need some hope and encouragement. The frustration and outright despondency tone recently is as you say understandable. As I'm sure you know Goldman Sachs just came out with a bullish gold report suggesting a price of over $2,100 per ounce in 12 months.

Here is a bullet summary of the report's key points:

"In 2021, gold was hurt by a strong US and weak EMs
Get long gold on weaker US growth and resilient EMs
Gold rallies during rate hikes
Gold is a risk-off inflation hedge, bitcoin a risk-on inflation hedge
Recession risk a key barometer for investors’ gold preference
Gold is a hedge against bad inflation"

One hopes this time they are correct.

Q: Hi Bill

On the subject of inflation. I have been listening to Rao Pal's long term macro thesis. He attributed the inflation in the 70's and 80's not only to monetary policy (Guns and Butter), but also to the entry of boomers into their consumer period (Homes, furniture, cars, etc.). Fast forward to today and we are in a period where boomers have, and continue to, retire. resulting in a consumer down cycle, and thus a deflationary influence. (I'm not going to say the D word outright as I know where you stand ;-) ) However, we also have a 'no holds barred' (highly inflationary) monetary bonanza. My feeling is that the monetary policies outweigh the demographics for now. Do you think that the demographics will matter in any meaningful way in the next 5 or 10 years?


Q: Bill, I know you said you don't like the gold miner ETFs (GDX and GDXJ). I already own some individual names that both you and Fred like, but I would like to add an ETF so I have a more broad exposure so that any single name with a bad event (like NGD awhile ago) doesn't bomb me out to bad. For someone who doesn't have the expertise to select individual names would any other ETFs, maybe like the Sprott gold miner ETFs be OK (SGDM and SDGJ)? [I already own the Sprott gold fund SGDLX (the old Toqueville gold fund) altho the expense ratio is pretty high on it.] Thanks for any advice you can offer.

Q: Bill, not to nitpick on a well-stated summary and supposition, but I believe you were referring to 2007 not 2008. I remember it well as I was long puts on all the subprime clowns and when they collapsed in early 2007 I thought for sure the market would take everything else down in sequence. But alas, new all-time highs in July even as the Bear Sterns hedge funds blew up and made the news around that time, and the market shrugged it off and made a double top in Sep/Oct. It doesn’t matter, point well taken regardless.

Q: Hi Fleck,

I saw how despondent some readers are sounding. Its been a disappointing run in metals where nothing seems to work but for what its worth, the BPGDM is at 26 and the hourly, daily, and weekly charts for gold miners are actually looking not that bad. So while I am pissed I got stuck in this drawdown again, I just bought more and stopped looking at it. It does seem like charts and sentiment are favorable to the bulls. If one plotted the gold price, GDX, and BPGDM all on the same chart, you can see that a 25 or lower sentiment print has signaled every rally in gold and miners over the last 10 years. Its a pretty interesting relationship.

Also, if we rewind the clock to January 2016, some readers might recall Janet Yellen telegraphed 4 rate hikes that year and the stock market instantly got smoked and gold went down the rabbit hole to 1050. Yellen had to back off and we only got one rate hike that year and it came on...wait for it...a little longer...December 31st….insert eye roll here ——> and gold went haywire to the upside that year.

So we are in a very similar pattern with the fed now where idiot is telegraphing an unknown number of rate hikes and the stock market is tanking. The feds quandary remains the same as 2015 if you ask me (or maybe even worse now), and I have a sneaking suspicion we’re going to see the same reaction out of the fed, where the actual hikes will be far less than promised (watch what they do not what they say).
This would ignite a reversal in metals (at least to some degree) and possibly even stock market, if anyone has any confidence left in the fed’s sideshow.

Q: Simple cure for whipsaw: Stay with the primary trend. Use weekly or monthly charts and quit trying to out trade the day traders. Also, quit reading all the assorted hype from self-proclaimed experts, whose opinions change every few days. John Kennedy was warned by his father, Joe - a very skilled member of the Wall Street criminal class - "...never trust "experts"...". After listening to his "experts", JFK screwed up the Bay of Pigs invasion of Cuba. Later. he cursed himself for not heeding his father's advice.