FLECKENSTEIN: 'Bonds Are Finished As A Place To Hide'

Bill Fleckenstein

We no longer have to worry about deflation, says Bill Fleckenstein.In a new interview with Eric King, Fleckenstein expands:

The big problem which has perpetuated the deflation scare trade has not really been the United Sates.  It’s been the fear that somehow Europe’s banking system would collapse, and government’s would collapse, and the euro would fracture, and all of that.

But with the ECB and the Fed opening the flood gates of liquidity, Fleckenstein thinks that investors are well-advised to avoid bonds, and shift their exposures to metals.

his doesn’t mean bonds are a short tomorrow, but bonds are finished as a place to hide.  I’m not trying to make the point that it’s a precise moment in time, but in the big sweep of time, yeah bonds are finished.

It’s just me saying the deflation scare trade is over.  But if that’s right, metals and inflationary beneficiaries should do better, and bonds should do worse.  This is a huge shift in mentality, and it will have ramifications across broad swaths of things.  If it doesn’t happen by Friday afternoon, it doesn’t mean it’s not happening.

We’re talking about a multi-year change, and if it ultimately results in the bond markets of the world taking away the printing presses from the Fed by lifting rates, say, three to five years on the yield curve and further out, then there are huge ramifications of that.”

Read more at KingWorldNews.com.

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