While Korea's purchase would be a pretty chunky investment for many entities, that country is sitting on several hundred billion dollars and has the world's seventh-largest foreign exchange reserve, which makes that gold purchase more of an odd lot.

It is certainly fair to wonder why the Koreans would buy only that much. If they intend to buy more, they are tipping their hand, and if they don't, what good is $1.5 billion worth of gold compared with all the dollar-denominated confetti they are sitting on? On the other hand, perhaps they -- along with other central banks -- are just trying to let folks at home know that they get the joke and have begun exchanging their green paper for real money.

To Catch-22 a falling knife

Even so, while there are so many financial problems hiding in plain sight, internationally and domestically, our stock market has held up pretty well, at least until it began its recent slide (which was interrupted Wednesday, only to turn into a worldwide rout Thursday). It won't take too much more of that to spook Federal Reserve Chairman Ben Bernanke into commencing QE3, another round of money printing. I'm sure the macroeconomic data already have him leaning heavily in that direction.

Thus, at some point the weakness will be arrested by those who want to front-run the hints of QE3, which may begin as we head into the Fed's Jackson Hole shrimp fest (aka its Economic Policy Symposium, scheduled to start Aug. 26. (There are also strong hints it could start after next week's Federal Open Market Committee meeting.)

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However, if Bernanke doesn't promise QE3 soon, there could be even more stock market carnage, which will then cause him to give the bulls what they want (assuming he hasn't refueled the helicopters already). It is a bit of a Catch-22, but that has been clear to me for a while.

I don't expect QE3 to work particularly well, but if the market continues to be hit hard between now and then, it could prompt a big (though possibly brief) rally in stocks, even if economic activity is subpar. Gold, on the other hand, will likely go wild in the wake of QE3.

At the time of publication, Bill Fleckenstein owned gold, as well as stock in Agnico-Eagle Mines, Goldcorp, Newmont Mining and Microsoft.

This column is a synopsis of Bill Fleckenstein's daily column on his website, FleckensteinCapital.com, which he's been writing on the Internet since 1996. Click here to find Fleckenstein's most recent articles.