Nassim Taleb, who speaking at a Moscow conference today, the same place where Roubini said to get the hell out of the dollar, said that "it is a no brainer [that] every single human being" should be short Treasuries," citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration...Deficits are like putting dynamite in the hands of children,” Taleb said in an interview with Bloomberg Television. “They can get out of control very quickly.”I was wondering when someone with a high public profile was going to make that statement. Make no mistake, the Chinese will not ignore that comment. The more interesting question is: at what point will the market crossover from using the US dollar as a flight-to-safey instrument to using gold? There is plenty of evidence to suggest that this transition is beginning to take place. It can't help when people examine the reality that California is about ready to collapse unless Obama prints up some big loans ($20 billion or so) to that State. California has a larger economy than Greece and Spain combined - especially when looked at as a percentage of the overall U.S. economy.
Please keep in mind that Moody's is now making noises about the potential ratings downgrade of the U.S. Government. Remember that Moody's failed to officially downgrade Enron until just before Enron collapsed. In other words, Moody's is usually way behind the curve on risk analysis, so if Moody's is expressing concern, it's far too late to fix the problem.