Fleck's Thoughts

A reader was kind enough to send in a collection of his favorite "thoughts" from Bill, which are reproduced here.

Once inflation gets going, it has many "pulses" for items that go up and down. And there is zero chance the Fed will solve the inflation problem.

The story is always framed like the Fed is in charge. They are not...The story should be, "Bonds tank, Fed way behind the inflation curve.

A crash won't come out of the blue...Events would need to set it up, so I can't even guess at that. I would just plan on recognizing change as it developed.

There is no new normal in markets, as they are always populated by humans and their emotions. The passive bid and activist central banks have changed things and altered the lag times, but this current state of affairs is not permanent.

Don't get emotional is Rule #1.

It's OK to have some shorts, but those should have company-specific catalysts, not macro ones, and you must be aware that shorts are not really working thus far.

Human nature is what causes markets to rise and fall, much as economic drivers. Human nature never changes, but what has changed is the passive bid and the coincident rise in the size of the option market. These two developments have warped the equity market such that it doesn't discount much in advance anymore, and negative events take longer to matter...But the size of the deficit and other problems will matter at some point. The trick is being patient while waiting for some signal that negative developments are starting to matter.

The real reason to own gold has more to do with monetary and fiscal issues rather than geopolitical ones. Though they are both about confidence in the status quo, too.

I prefer gold bullion to silver bullion and coins, though I do own all three, but far more gold. I prefer to trade silver, so I use futures and just sit on gold bullion.