The value of the U.S. dollar continues to plummet faster than Michael Moore getting shoved out of a C-130.
Gold now at $1,185. What happens when the DXY [U.S. dollar] hits 70 in a few days?
And the diagonal, soon to be vertical channel:
DXY at 70?
As the dollar hemorrhages value, Ben Bernanke's outstanding record as a financial Nostradumas continues to inspire confidence.
I was struck with Bernanke’s comment last week at the Economics Club regarding bubbles. He said:
"It is not obvious to me that there are any misalignments in the US financial system."
This comment has already gotten the attention of the media. Two years from now the blogs will be quoting it along with other notable words from the Chairman. Remember the following? Mr. Bernanke regrets having said this.
"We (the Fed) do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
When Mr. Bernanke made those comments back in May of 2007 he was either misrepresenting the facts or he simply could not see the implications of the facts that were in front of him. I don’t think he was fibbing to us then. He called it as he saw it. He simply had no clue what the pieces meant. I am concerned that he is equally out of touch today.
How could Mr. Bernanke not see that zero interest rates are a misalignment?
Bruce Krasting goes on to suggest that the time of reckoning is near.
You can’t ask for a better example of the market’s attitude towards America’s monetary stance. It is starting to get downright hostile.
It would be a kick in the pants to the entire financial system if the price of gold started to have a meaningful impact on monetary policy. I think that is exactly what is going to happen. It is just going to take a while. Bernanke continues to believe that nothing is misaligned. We are going to wake up and find out that things are horribly misaligned.
Don't cross the streams, Ben!