Fleck Not Happy
Bill Fleckenstein was in rare form in this interview with Eric King over the weekend (partial transcript is here) as he lamented the mess that the Federal Reserve has gotten us all into and the ongoing charade that everything is going to turn out just fine.
… the Fed has overdone it.
Now, not everyone will conclude that and they won’t conclude it right away. And the Fed will fight that, and they will keep printing, but we will be on our way to the 1970s.
Maybe people will start to look at the stagflationary environment that we actually have, the horrendous job growth, weak GDP, and inflation that’s probably twice as high as whatever real GDP is, and it will be seen as stagflation, and that will have consequences.
But right now, people continue to believe that the same idiots that created all of these problems, namely the central banks, are going to somehow get us out of it with the exact same policies that got us into it, only at a much higher (aggressive) level of pursuing those policies.
We’ve had so much artificial stimulus, and we’ve misallocated so much capital. And over the couple of decades we’ve been doing this we’ve kind of broken the economy and the financial system. So, I don’t think you can worry about what’s on the other side. We haven’t even gotten people to understand the charade that we have.
What the masses have done over and over again is to believe one more time that it’s all going to be OK … We are in a unique moment in history. The whole world is printing confetti, and (yet) people seem to think that’s going to work out fine.
I guess time will tell. Back in 2005 or 2006, virtually no one thought we were headed for the worst financial crisis since the Great Depression and now, five years, later, there is an ongoing discussion about whether our problems are cyclical or structural, but, as in 2005 and 2006, virtually no one thinks we’re headed for another crisis.