"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," is the subtle manner in which the outspoken Bill Fleckenstein describes the 'fantasy' in which most Americans live during this wide-reaching interview [4]. "We’ve had so much artificial stimulus, and we’ve misallocated so much capital;" he adds, warning that Americans "believe in the lunatics at the Fed, and the rest of the Western world is that way (as well)." His conclusion is clear, "as the fantasy dies, then they will understand the need to own gold," and if the Fed tapers and is forced to un-Taper, "more people will see that the Fed is trapped."
How will the economy handle higher rates?
“It’s not going to handle it. That’s why if the Fed tapers and the bonds start acting funny, they will end tapering because they will start thinking, ‘Geez, we can’t have this happen.’
Then, more people will see that the Fed is trapped.
Via SHFTPlan blog [5],
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.
…
The longer you keep pursuing insane policies, the more you pile (them) on top of each other, the worse it gets … So, when the Fed can’t print money and we have to deal with this, it’s going to be brutal.
…
The fact of the matter is Americans, in the aggregate, don’t see any reason to own metal. They believe in the lunatics at the Fed, and the rest of the Western world is that way (as well). Obviously Asia doesn’t quite see it that way. But it’s understandable why the average American doesn’t buy gold — If they believe in a fantasy, why would they need it?
As the fantasy dies, then they will understand the need to own gold.
and Via The Mess That Greenspan Made blog [6],
… 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.