Stocks Down, Gold Up, Oil Shock, N. Korea's Test And Bankrupting Social Security
Bill Fleckenstein
thinks stocks will head lower over time, "as the complications from inflation and higher interest rates eventually compress price-to-earnings multiples and expectations are lowered about what sort of earnings power companies actually have." He's also certain that "the dollar will head lower and precious metals will trade higher."
He'll get no argument from Prieur du Plessis, who
wrote last Friday that as "printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history," the long-term case for gold is "arguably positive."
Lots of people are worried about the next oil shock, despite the commodity's current low price following last year's shock.
From last Friday's
Economist:
Much of the world's "easy" oil has already been extracted, or is in the hands of nationalist governments that will not allow foreigners to exploit it. That leaves firms to hunt for new reserves in ever more inhospitable and inaccessible places, such as the deep waters off Africa or the frozen oceans of the Arctic. Such fields take a long time and a lot of expensive technology to develop. Worse, new discoveries tend to be smaller than in the past and to run dry faster.
So oil firms must work doubly hard to replace declining fields and to increase output. Yet the oil industry is short of equipment and manpower, thanks to underinvestment in the 1980s and 1990s, when prices were low. As soon as the world economy starts growing again, the theory runs, demand for oil will once again outstrip the industry's ability to supply it.
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
