Fleckenstein says the Fed has to admit it caused the credit bubble or “they’re never going to fix themselves.”
“In the end, the Fed as we know it will be abolished and we’ll go on to some other standard, where a group of men and women behind closed doors can’t repeat the mistakes every single committee that was in the Soviet Union before it died a deserved death.”
Low interest rates won’t only cause inflation and a next bubble, Fleckenstein says, they will also cause pain for Main Street.
“Anyone who lives on any kind of a fixed budget, whether a pension or government assistance of someone who’s retired and planned ahead, they’re getting squeezed on both sides: cost of living is ratcheting higher… and they’re not being adequately paid for savings.”
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