Bill Fleckenstein on the Grant Conference

Jim Grant just held his fall conference, and Bill Fleckenstein describes it (lightly so as to not be unfair to Grant) a bit concerning gold and inflation:

I also had a chance to chat with the Lord of the Dark Matter at the conference. He has information, on pretty good authority, corroborating the viewpoint expressed on several blogs that Chinese authorities would like to purchase the International Monetary Fund's gold.

Whether that transaction comes to pass, we'll have to wait and see. But when it comes to China's interest in gold or other hard assets, it does seem that where there is smoke, there is fire, and China is making its interest known by its actions.

Just because the Chinese don't come out and say, "Gee, we want to buy all the gold we can," doesn't mean that they don't want to. Obviously, if they did say something like that, they'd be shooting themselves in the foot, and they're way too smart for that.

True. I suspect China has been a major behind-the-scenes buyer of gold. And who can blame them? They own so many US dollar assets and -- despite what the US Federal Reserve or American administration say -- America want to cheapen those assets with inflation.

On another note, I see that the Longleaf International Fund will be removing its currency hedge. A lot of the value players hedged currencies back when the US dollar was strong, and a surging US currency cut into their results when it came to international/global funds. That doesn't look to be a problem for the foreseeable future.

Comments

[David]

Mentioned the Chinese interest in IMF gold on Twitter when the announcement of 403 ton gold sale was official. Good to see more on this here, thanks for the update!

[John]

@David: Aside from the fact that I believe gold is honest money and that I like the gold standard as it existed up until WWI, I'm not a gold bug. But I these are certainly interesting times for gold and the US dollar.