Bill Fleckenstein on Gold and Gold Stocks

Bill Fleckenstein seems to have a lot of faith in central bankers--to do exactly the wrong thing,  So much, in fact, that when asked about gold and gold mining shares, he commented:

"I don't see any alternative." 

Hear the entire interview (about 12 minutes) courtesy of King World News.

Take Possession of Your Gold and Silver

The following is from another fascinating post on Zero Hedge:

"While Gerald Celente is crying about his lost six-figure account, Bill Fleckenstein also has personal money tied up with MF Global. He is hopeful that he will get it back but is critical of the authority figures involved. Celente does not expect to get all of his money back. Ann Barnhardt of Barnhardt Capital Management has shuttered its operations after six-years in the business. She did not feel like her clients’ funds were safe in the futures and options market any more. Lawrence Lepard, who posted on Zero Hedge, wonders if the MF Global failure was a hit job done by the Fed. My point is not about who is right or wrong . . .

The author, in addition to coining the phrase "fractal in a frying pan," makes the point that a global banking meltdown we are all at great risk of losing assets we believed to be safe.

I have no idea who first said that gold has no counterparty risk.  It's quite likely that I first saw the idea expressed by Bill Bonner in his Daily Reckoning.  In any case, it's probably worth considering that idea at least one more time.

Insurance contracts, stocks, mutual funds, ETF's, CDs, annuities, bonds, dollars, and a host of other investments all share one potentially fatal flaw.  Each is only as reliable as some party on the other side of the equation.

A gold or silver coin in your hand is an entirely different matter.  While it's true that you may need another party to trade it to, thousands of years of history suggests that your gold or silver coin will remain a safe store of value.

And please note that I did say "in your hand."  Iin good times or even fair times I have a reasonable amount of faith in GLD, SLV, Perth Mint Certificates and the like.  It seems fairly likely, though, that we have bad times ahead.  Plan accordingly.

Fleckenstein Wonders Why Gold Gets No Respect

Bill Fleckenstein is nobody's fool.  His Contrarian Chronicles are often an interesting read.  At the least, you can expect to see an original thought from time to time, and that's quite rare in my opinion.

Naturally I appreciated the following from Mr. Fleckenstein.

As an asset, gold has helped protect and deliver gains versus paper money for 10 years running, yet the popular media heap nothing but scorn on it.

So obvious, but also so vitally important and largely unmentioned by the hacks in the mainstream.  As if that weren't enough, he goes on to include this priceless gem.

I keep waiting for the day when folks realize that if you invest in the shares of a gold-mining company, you basically own a piece of the money-creation machine. It's sort of like owning a piece of a central bank that isn't staffed by losers.

This single article was worth the price of my subscription!


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