Marty

This is simply not true. I have seen Fleckenstein say very explicitly on multiple occasions that he views hyperinflation as a low probability event. He sees significant inflation (not hyperinflation) sometime in the future, but not in the immediate future. He is very careful to qualify his viewpoints with the caveat that he doesn’t know when outcomes he believes will come will actually occur, just that they will occur.

Am not sure where you obtained your information…

I agree with ObaMao that Fleckenstein’s stock picks have an inconsistent record. I don’t think stock picking is his strength (except maybe gold stocks). His strategic thinking is quite good in my view, although he often seems to expect the big events to play out sooner than they actually do. For example, he talked about the housing bubble and its hazards a LOT, well before most others (certainly well before TPC did, since TPC said he noted it in 2006), and those who listened to him and avoided investing in real estate during that time saved themselves a lot of pain. He may have been the first person to use the phrase “housing ATM” to refer to home equity withdrawals to fuel massive consumption in the US. Fleckenstein also talked a lot about the Nasdaq bubble as it unfolded, although he was early in predicting its end; someone who got out when he started getting concerned would have missed out on much of the spectacular rise (and also all of the spectacular decline…). Finally, he warned that the trap door on equities could open within days (which it did) in Fall 2008; in that case he was not early, and that warning saved me and others some pain.

As others have noted in the past, Fleckenstein is a fan of the gold standard (although he doesn’t believe it will actually be reinstituted, at least in its traditional form). I think I understand his rationale — he sees it as a way of imposing fiscal discipline and impeding recklessness. For example, he claims that Greece could never have gotten itself into its current mess in the first place if it had been under a gold standard. (Of course, now that they’re in their mess, it seems like it would be a particularly bad time for them to go onto a gold standard…)

His viewpoints seem to be strongly influenced by the Austrian school, but this outlook helped him see the Nasdaq and housing bubbles (and their demise) well before most people. Maybe you are right that he got the causes wrong, which would imply his analysis somehow led to substantive predictions (ones he talked about again and again and again…) because of “luck.” However, one could also argue that much of his analysis was actually correct.

I’m also not sure why you think his analysis of the effects has been wrong, since much of what he expected has unfolded (including his expectation that there would be lots of money printing in response to the events of Fall 2008). For example, in Fall 2008 he laid out his big-picture view, using an analogy of three baseball games corresponding to three different crises: the financial crisis, which is what nearly imploded the financial system in fall 2008; an economic crisis, which was the descent into recession; and a funding crisis, which would ultimately “take away the printing press” (including that of the Fed). Of these, the first two have obviously already happened, although the first one was hardly a prediction (it was already under way at the time). He has talked about this funding crisis for well over a year now, but obviously it is at best in its early stages with the funding issues in some European countries. Fleckenstein is very sure it will ultimately happen even in the US, probably within the next couple of years (no timetable, though). Certainly TPC and many others strongly believe it won’t happen in the US for reasons he has made very clear. So, going forward, this will provide an empirical test of EMT which TPC is fond of, versus a more Austrian viewpoint. But it will take time to unfold, if it happens at all. We’ll see…