Often wrong, never in doubt. – Bill Fleckenstein

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Fleck's Thoughts

Ask Fleck

Q: Are you familiar with Brent Johnson and Daniel LeCalle? They both have Austrian viewpoints but seem to come to completely opposite conclusions as to what outcomes to expect in the short term. Mainly against inflation. Both forecast near term dollar strength due to rising rates and a maturity wall across the world that will force many debtor nations to buy dollars.

Daniel adds the additional observation that China is exporting deflation to some of these debtor nations by lending them dollars under the condition that they provide China with raw materials...

So my question to you is do you agree in the short term? If not, why? Their logic seems pretty sound.

Q: Good morning Fleck, If CPI numbers come in higher than expected (higher inflation) why is this bad for gold?? This is what I have been waiting for for the last decade I thought.

Q: Bill,
Yesterday you said “the stock market rally probably won’t last more than another week or so.” In Mr. Skin’s post he agreed with you, but added “we should see a pullback before ramping into that all-important "Career Close" on Dec 31.” Do you see a final rally in the last few weeks of Dec?
If yes, would that be a good time to buy Aprile puts on the SPY?

Q: Mr Bill,
From 11/7/18:

Q: Bloomberg article echoing my thoughts about LQD as a vehicle to capture a credit problem...

Hedge Fund Manager Stakes Own Cash on a Bet Against Credit ETFs

I would appreciate your take on this strategy. Is the instrument itself (ETF) a catalyst for profit if credit spreads widen in corporate debt, or is this just a way to profit if credit spreads widen? During a selloff ETF liquidity may not be that great.

Thanks for your service.

Q: Hi Bill,

One of Mr. Skin's internal market comments discussed % gainers and losers. Thursday Nov 8 the market seemed weak with Nasdaq -0.5%, S&P -0.25% and all the FANG stocks down 1-3%.

I had a look at the US composite % gainers and losers and note that the top 8 gainers varied from 20-37% and the top 8 losers 16-31%. By this metric Thursday would suggest internal market dynamics were more positive than negative.

Is my analysis or application of what Mr. Skin discussed correct?


Q: Hi Fleck,

As a follow up to my question yesterday, over the next 2-3 years isn't there a high probability of a rally in U.S. treasuries as the Fed will reduce short term interest rates during a recession and/or bear market in stocks? Thanks!

Q: Bill:

I had reason to look up Calvin Coolidge today, who was probably fiscally the best US president ever, good at saying no, and yet supportive of many positive causes, including women's suffrage. His foundation site is a great starting point:

Coolidge balanced the budget every year he was president, from 1923 to 1929. When Coolidge left office, in early March, 1929, the federal budget was lower than when he came in and 98% of Americans paid no income taxes at all. On his watch, the national debt was reduced from $22.3 billion to $16.9 billion, Industrial production increased 70%, real earnings for wage earners grew 22%, and unemployment averaged 3.3%.

Question 1: Given that Coolidge was extremely fiscally responsible, what then caused the 1929 crash, only 7 months after he left office? (I've read that Hoover was actually pretty good, too, so I don't think Hoover did that much in 7 months to make a difference.)

Question 2: I'm assuming that somehow the Fed was out of control, despite Coolidge being very much in control. If this is the case, was Coolidge unable to restrain the Fed, or was he somehow unaware of Fed behaviour?

Q: I was recently doing some research and looked up the total number of equity precious metal mutual funds in existence according to Morningstar data. Surprisingly, or perhaps not surprisingly, there are currently only 19 mutual funds. Any mutual fund family that offers a fund in multiple share classes I counted as 1 fund (ex: First Eagle Gold has an A, C, I, R3 and R6 share class).

I also ran a screen on the number of equity precious metals ETFs and there are only 12 (not including the few leveraged and inverse leveraged ETFs). GDX and GDXJ are each substantially larger than the combined other 10 ETFs.

Not that you needed any confirmation, but apparently there isn't a lot of demand for precious metal equities. I am hoping that in the future more fund families will be adding equity precious metal funds due to increased demand and higher stock prices!

Q: Hello Mr. Fleckenstein,
Did you see a good reason for spanking WDO?

Q: From your Ask Fleck response: “"Declining asset prices" is not deflation.” But do the deflationists understand that? Whenever I read their arguments they seem to get the basic meaning wrong, BTW, looooong time subscriber.

Q: Fleck,

Also, does this drop in oil prices help the miners to a considerable extent?