FLECKENSTEIN: This Is How The 40-Year Paper Money Experiment Will End

via Business Insider:

Hedge fund manager Bill Fleckenstein thinks central banks around the world are in panic mode and are thus headed toward mass money printing as they try to pay down historically high levels of debt.

Bill Fleckenstein

Today, Fleckenstein told King World News that it will not end well when investors catch on that negative interest rates are a bad deal for them:

Eventually the bond markets will say, ‘Oh my God,’ and instead of paying governments to let them lend them the money, like you now see with negative short-rates in various countries around the world, the bond market will say, ‘Hey, you are going to cheat us. We know you are going to cheat us, now we want you to compensate us for that.’

And the bond market or the currency market or a combination of the two will take the printing press away. That’s how it will end. That will be the end of the 40 year experiment with all paper money.

Fleckenstein said that in spite of all of the conversation surrounding deflationary risks in the wake of a housing collapse in the U.S. and a eurozone spiraling toward economic disaster, inflation is still the biggest risk:

People in America today talk about deflation. There’s no deflation. Housing prices have collapsed, but it still costs more every year to do what you used to do. So there’s no deflation. There’s not going to be deflation until they take the printing press away.

Read more at KingWorldNews.com.


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