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Fleckenstein Capital’s Bill Fleckenstein on Europe’s debt crisis and the lack of an economic recovery in the U.S.
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EU's problems certainly look a little bit better today and that helped our markets but truly if you're looking at what's going to happen with the markets there is some new research -- that shows.
That household income in the US fell more in the two years after the recession.
Then it did during the recession so what does that mean what we have somebody who says while things may seem -- here in the US we're actually better off now than we were three years ago.
The -- Liechtenstein is with like and Scion capital and he's the author.
Greenspan's.
Bubbles and He joins us now bill good to see that thanks -- first of all what do you what do you make of this market I mean is this just up.
A bump in the road because I did mention I mean one of those solutions so called over in Europe was to nationalize a bank.
Well they're trying to take a page out of our playbook from nineteen -- certain 2008.
Whereby a -- TARP recapitalize the banks and the Fed -- government debt ECB is not quite you know capable of buying government debt yet so they.
To step in that direction with the LT hour of the talk about the EFSF buying bank stocks so they're they're trying to cobble together something like what we did.
And it's more difficult because it's Europe and for all the reasons are obvious to -- -- So my guess is this that the worse things get don't die harder will try to come up with something where they can then kick the can down the road a ways.
Bill you have emerged over the past decade or two as a very important contrary and voice so I'm dying to know what you make of a rally like we saw today having to move of 329.
Points.
On the Dow -- simply a belief that banks will be.
-- capitalized in some way shape or form in Europe.
Are you believe for this rally or do you feel that there -- there is a -- drop of some sort or there are better ways to invest than just your basic large cap names.
Well that's multi.
Headed question but I'll try to tackle it.
Look we've seen so much volatility and there's so much money and its -- run in -- senseless quantitative oriented fashion.
That anything is possible on any given day in a big move like 3% is quite often just noise having said that.
I hope springs eternal again that.
The -- -- -- pull something off like I just described.
Quite possibly maybe a lot of the computers were leading on the short side and so you have a a big rally.
That doesn't mean that it has to end it nor does it mean our troubles are behind this mean.
You mentioned some stats about.
Incoming and since we got -- recession will quite frankly.
I don't really believe we -- really got out of this recession.
And if you take a look at it from the fact that we burst the housing bubble we had a bad economic period ever sense.
And -- better now it's getting worse we ever really headed in that that's approaching a real recovery status.
Just because some government agency said we came out of recession doesn't mean we did.
Mean so I think.
With our financial system here is better than Europe's is in our financial system is better now that wasn't -- 1008.
But from a -- standpoint and from a getting our government.
Finances in order we got a lot of work to.
You hear bill what about our currency it's it's been battered you can that you you -- goes all way back -- the Greenspan a lot of people agree we I mean how do we how do we get the dollar -- and we recover.
Unless we get a firm strong dollar again.
No that's a good point I think.
I think this is that one big continuum.
You know the we had a gold standard for a hundred years and we -- -- -- like gold standard which ended in 1971 and we've had all Paper monies and 71.
And slowly but surely we've turned -- -- confess.
I think that process has to run its course.
I think that the policies that Bernanke's pursuing.
While it's that they seem palliative in the short run are hastening the end of the all Paper dollars the king.
Our currency and I think will head towards a new courage currency regime.
Down the road when everyone decides that this all Paper money just doesn't work -- that -- -- -- -- at all you're gonna get a dialogue going back to a gold standard how we're how would that be -- it's it's.
Some will some form of it and I and I don't mean to say that because I think gold is magical or something like that it's just the least bad alternative because the weighted.
-- any net imbalances are dealt with on the gold standard oil and the fact that that that doesn't that mechanism is what's you know we didn't have.
All prosperity but the booms and busts we got through them and so.
We would you know what would it would be able long complicated process of getting -- world's countries back on the same orbit they are fed up with the dollar the Fed up with the Euro the -- up at the end so.
What are these days is gonna happen well.
They're obviously as -- just pointed out problematic issues about investing in the US and also of course Europe major major issues there but.
You just got back from a point on the planet where you say this is a real opportunity I'll let you reveal it to our viewers of where you think.
This is a chance for investors to get in early on something where.
Was that.
Well I was in Mongolia.
Of all places.
And is suffice to say that it is it -- -- is about to undergo -- is in the process in the early days of undergoing.
The boom of a lifetime.
Unfortunate in any -- it -- -- on nine China's northern border and has the minerals.
That China needs.
It's a couple of 22 very large mines.
02 units copper in TT which is coal and lots of other.
Our minds and the amount of money that is going in there just to build these mines much less the money that's going to be coming back out.
Is equal to the size of their GDP which is about five or six trillion right now.
-- they have a soundly managed currency.
They believe in hard work it that -- me a median age 26 years old it's the only problem for investors are.
Is that there are not a lot of vehicles to invest those stocks to trade their trade very thin lately are very many of them.
-- -- -- -- it's gonna be a spectacular opportunities so people should definitely be.
I'll looking for ways to try to capitalize on that because it's going to be -- -- is gonna be huge and run for five or ten years regardless of what the rest the world does bill thank you so much for your for investing in real thank you for her Russia Mongolia -- -- -- I -- --
