Simon Black: "The Market Is Telling Us That The Dollar Is Finished"Submitted by Tyler Durden on 02/28/2011 12:46 -0500
There’s major shift occurring right now in financial markets. Sure, the food and freedom riots that are spreading across the globe are a major indicator that civil unrest follows very closely behind resource shortages and economic turmoil… but there’s something else that I’ve noticed recently– it’s a sea change in the financial system. In the past, major crises normally caused investors to seek safe haven assets, and everything else equal, the dollar would rise. They call it a ‘flight to safety’, and investors would flock towards the perceived stability of US Treasury securities. Fast forward to today. Mubarak. Gaddafi. Khalifa. Al Said. Ben Ali. Etc. There is no shortage of turmoil right now… yet we are seeing the dollar get clobbered while gold, silver, and smaller currencies like the Swiss franc rise. This represents a major shift in the way that the market views risk. Ironically, this makes precious metals among the most attractive safe haven alternatives– the fact that they have no real functional value is a net positive. In other words, $20 wheat means blood in the streets. $2,000 gold only makes for pithy headlines, and its significance is easily dismissed when highly regarded sages like Warren Buffet dispute the notion of holding precious metals (nevermind he bought oodles of silver in the late 90s).
The funny thing is that Tyler, and some of his whacky extremist metals/commodity bulls/dollar bears and ZeroHedge.com are totally possessed with their dollar collapse, gold to $12,000 and silver to $500. I hate to say it but promoting silver coins sold on retail webites is a sign of a top...especially you can get enough emotion going to get a smart guy like Tyler pyched to do it.
The reality is the dollar is likely to ruin all their best laid plans...
