The Financial Mess Continues

Bill Fleckenstein, who predicted the current financial crisis, is expecting more of the same:

As for the "dress rehearsal" to our ultimate funding crisis, aka the current financial mess in Europe, my oft-cited source the "Lord of the Dark Matter" had this to say about where we are in the unraveling of the euro: "It took over three years from the first EPDs (early payment defaults) in the summer of 2006 until Lehman's demise. Economic and monetary union has been from inception an experiment wrapped in a tissue of economic lies. . . . Its unraveling -- for that is what is actually happening in the plumbing -- has been telescoped into a few short months, and because the unraveling is all in the plumbing, I do not think the median investor nor median policymaker is able to grasp the significance of the unstoppable process that appears to be under way. . . . The enormity of the problems there cannot be overstated, and the chances they can be overcome are diminishing by the day." In short, he thinks there really is not much hope for the euro in the end. As he says, "Europe's Lehman Bros. is actually Europe." (And Lehman Brothers' collapse, of course, precipitated Wall Street's near meltdown.) However, as I noted recently, I think it will take some time for all of this to play out. As has become apparent to the world's investors, paper money is no good, hence the worldwide bid for gold. Become a fan of MSN Money on Facebook This doesn't stop gold from being volatile, nor does it guarantee that every day it will increase in price or rally on the days that one thinks it ought to. But over time it has, and it will protect folks' wealth from consequences of the printing press.