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Failure To Reach Budget Resolution Sends Dollar Plunging, Silver At New Post Hunt High

Submitted by Tyler Durden on 04/07/2011 22:44 -0400

Following news that an 11th hour attempt to resolve the budget impasse between Obama, Reid and Boehner has failed, the dollar, and all related carry pairs, are getting obliterated. At last check the EURUSD was north of 1.4350, while all Yen funding pairs rose back to intraday highs. Which in this bizarro world also means that futures are now at highs: yes - a government shut down is bullish for stocks. The good news for those who continue to believe, what is only being realized by others, namely that the dollar's days are numbered is that silver has just touched $39.85: a fresh post Hunt Brother high. Gold is following suit.

And the carry basket:

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Thu, 04/07/2011 - 23:27 | 1148312 boricuadigm-shift

$39.97 - Yeahhh A little push

Thu, 04/07/2011 - 23:29 | 1148345 boricuadigm-shift

$40 - Touched for a second. Congratulation guys. Thanks Zerohedge and crew for giving me the red pill and teaching the truth about silver/gold back when it was zerohedge.blogspot.com.

Thu, 04/07/2011 - 23:32 | 1148355 live free

I second that... at this point, I'm prepared for anything and just sit back and watch the carnage.

Thu, 04/07/2011 - 23:32 | 1148364 Long-John-Silver

Rolls over, lights up a smoke, and asks Blythe if it was good for her too.

Thu, 04/07/2011 - 23:51 | 1148415 boricuadigm-shift

Dollar tanking like a rock in a well... Shit! 75.23

How low can you go? (Ludacris) - Rhetoric...Survival rate... drops to...

http://www.youtube.com/watch?v=ox-lfowevqA

Damn it... it got stuck!

Thu, 04/07/2011 - 23:19 | 1148290 Caviar Emptor

When you hear Cramer proclaim that he's a gold bull you know we're nearing the end of days

Thu, 04/07/2011 - 23:21 | 1148303 alien-IQ

silver at $40

Thu, 04/07/2011 - 23:23 | 1148305 Caviar Emptor

Note to CNBS: That "cash on the sidelines" you always BS about? Well here it is, baby! Getting turned to gold, silver and things tangible.

Thu, 04/07/2011 - 23:22 | 1148314 f16hoser

$40! Blythes' uterus just fell out.

Thu, 04/07/2011 - 23:36 | 1148373 SWCroaker

Ever think about what they do with all the money from selling contracts short? Think they just sit on it? Maybe they call up the blockheads at AIG and enter into CDS bets (on the long side) of silver. Maybe they hedge all of their COMEX shorting by buying crap loads of calls for silver miners. They could very well be making money hand over fist and laughing their asses off all the way to the bank, *despite* the cost of their shorts. For all we know, Blythe has silver coated vibrating toys to match her pointy silver bra.

If you know where the market is going in advance, you'd have to be an absolute blithering idiot not to make money on it; the COMEX contracts are for sure not the only leveraged opportunity linked to Silver...

Fri, 04/08/2011 - 00:14 | 1148515 iDealMeat

+600 Trillion derivatives market... Sorry folks, VIX is for kids.

-Blythe

Fri, 04/08/2011 - 00:10 | 1148507 Mr Lennon Hendrix

I hope someone mints a silver coin with her face on it. Sort of like Jefferson on a $2, or Jackson on a dub, you know?

Thu, 04/07/2011 - 23:22 | 1148319 silver_serf

I am as bullish on silver as any ZH'er, but as long as we look to the criminals to tell us the price, comex, london, etc., it is still their game. We are not beating them at the game they make the rules to. When silver and gold are free markets, there will be no more FED. Maybe I should be more bullish on farmland and buggy whip manufacturers

Thu, 04/07/2011 - 23:51 | 1148441 Bringin It

Farm to subsist yes, but as an investment, farm land is subject to tax confiscation. Happens all the time in The Homeland.

Fri, 04/08/2011 - 03:44 | 1148983 silver_serf

I have gone long on farmstead (part of a well diversified portfolio)

Thu, 04/07/2011 - 23:24 | 1148321 jadencore

Just broke $40...

Thu, 04/07/2011 - 23:28 | 1148347 bania

did it break $40? my chart shows it kissed $40.00 and pulled back

Thu, 04/07/2011 - 23:37 | 1148378 jadencore

My high shows up as $40.005, but it'll probably be taken out shortly anyway

Thu, 04/07/2011 - 23:35 | 1148380 Long-John-Silver

Today's new high it tomorrow's resistance. $40's broke and now it's on for $50.

Thu, 04/07/2011 - 23:57 | 1148470 Missiondweller

Where are you getting the price/quote?

Fri, 04/08/2011 - 01:36 | 1148792 Vlad Tepid

Try here:

http://netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChart.aspx

Thu, 04/07/2011 - 23:26 | 1148323 epwpixieq-1

Finally the end will be like this: http://energybulletin.net/stories/2011-04-04/financial-totalitarianism

God created Electricity, or maybe Electricity is God, and it is the only true wealth one can have. But, it actually helps to have good conductors too, such as Silver and Gold.

Thu, 04/07/2011 - 23:53 | 1148456 Cursive

@epwpixieq-1

And so, the answer to the perennially annoying question “How do I invest my money for it to survive financial, political and commercial collapse?” is this: “There is no answer to your question. Try asking a different question, to which there might be an answer.”

Good read.

Fri, 04/08/2011 - 06:56 | 1149130 Bicycle Repairman

Cutting through it all: So we return to the 19th century. Gold and silver were money then. If you have more gold and silver you live more comfortably than if you don't.

Thu, 04/07/2011 - 23:25 | 1148330 plata pura

A GSR of 36.63 be intolerable.

Thu, 04/07/2011 - 23:28 | 1148340 chump666

we got a 1.05 on the AUD creeping

Thu, 04/07/2011 - 23:31 | 1148349 Caviar Emptor

There's a statement being made tonight. A vote of no confidence on a global scale. The Fed can choose to ignore it at its own peril. Because its power is crumbling and its marginal efficiency is waning.

Thu, 04/07/2011 - 23:52 | 1148450 Bringin It

Wooo Hooo! Yeah!! About time!! [he says][while ringing a cowbell and banging on a gong.] Loudly.

Thu, 04/07/2011 - 23:32 | 1148353 Timmay

If we now have a boat load of US$ Carry Trade going on, someone please tell me just how Uncle Ben ever plans on raising rates??

Thu, 04/07/2011 - 23:32 | 1148363 Stuck on Zero

This is just bull wonkers. The Gov will make a huge fuss about the perils of government shutdown driving PMs way up. Suddenly they will announce a compromise (that screws the country for the sake of the rich) and PMs will fall like lead turds. GS and JPM will be playing this for all it's worth. At the end of the week we will all be poorer and Wall Street will be richer. Buy and hold physical.

Thu, 04/07/2011 - 23:35 | 1148379 Caviar Emptor

The trend is your friend. And it's over a decade long. And its stood the test of every possible insult including financial armageddon. Buy any dips in PMs.

Thu, 04/07/2011 - 23:54 | 1148465 Bringin It

I missed the dip by a penny last night.

Thu, 04/07/2011 - 23:40 | 1148396 Misean

I'm sorry, but I'm not buying the Bull Spit that the "government shutdown" is doing jack squat, except keeping the marks focused on the 3-card monty table.

Thu, 04/07/2011 - 23:34 | 1148367 chump666

asia is selling USD...like no tomorrow.

Thu, 04/07/2011 - 23:37 | 1148382 Misean

OK...so what are they buying then?

Thu, 04/07/2011 - 23:39 | 1148393 Long-John-Silver

PM's obviously

Thu, 04/07/2011 - 23:40 | 1148405 Misean

I know what you're saying but there's just a smidge too much fiat sloshing around to be absorbed by a few penny rise in silver...just sayin'.

Thu, 04/07/2011 - 23:40 | 1148404 Mr Lennon Hendrix

Britney's new album?

Thu, 04/07/2011 - 23:46 | 1148419 Misean

She has a new album? How retro!

Thu, 04/07/2011 - 23:42 | 1148406 chump666

high yeilds and stocks, thats it.

Thu, 04/07/2011 - 23:48 | 1148430 Misean

OK, that makes some sense...given the charts.

Thu, 04/07/2011 - 23:45 | 1148427 jadencore

Interestingly, Silver was headline news in my country yesterday, headline read "SILVER, THE NEW GOLD".

Thu, 04/07/2011 - 23:37 | 1148391 Long-John-Silver

There is no tomorrow for the USD. We knew this was coming at some point and now the Asians know it as well.

Thu, 04/07/2011 - 23:38 | 1148397 Seasmoke

this might really be IT.....should be interesting if we get into the weekend

Thu, 04/07/2011 - 23:40 | 1148399 Caviar Emptor

Dollar just took out March intra-day low

Thu, 04/07/2011 - 23:50 | 1148438 Mr Lennon Hendrix

DOA.

Fri, 04/08/2011 - 01:41 | 1148791 Arkadaba

Great band and kind of apropos:

http://www.youtube.com/watch?v=vCwfNeAn_98

Thu, 04/07/2011 - 23:41 | 1148401 chump666

AUD 1.05 knocked out...huge option stop up there apparently.

Go Asia! An inflation shitstorm coming your way

Thu, 04/07/2011 - 23:42 | 1148411 Misean

USDCHF is interesting atm.

Thu, 04/07/2011 - 23:43 | 1148416 Bazooka

Tyler, you keep using Bizarro, etc....on how Futures react to news....only linear extrapolation would see it as bizarro.

Sentiment or social mood drives the market, not exogenous events. These exogenous nuclear, tsunami, and USA gov. shut downs, etc....are all exogenous.

The Endogenous effects (social mood) precede exogenous events.

The rush for the exit in Stocks, Gold, Oil, Real Estate, Bonds, Munis, etc. will commence once social mood sets the endognous triggers and many will scratch their heads because with phenomenal crash will come supposedly very good news on economy and geopolitical events.

Go short incrementally or better yet stay on the side lines. Short term Treasury Bills or cash equivalents....

Uber bullish sentiment will turn....and when it does, what a show it will be for the exits.

Thu, 04/07/2011 - 23:50 | 1148437 Caviar Emptor

The only uber-bulls are the Fed and network PDs and assorted dependent banks. Market volume has been ultra anemic. Fund flows are net negative. Without the Fed bid and Bernanke put you could buy stocks in bulk at Costco. There's no bullish sentiment to be turned, it's all been smoke and mirrors and every well-informed person knew. There is no spoon, there is no market.

Thu, 04/07/2011 - 23:56 | 1148472 Long-John-Silver

and a Silver wind is sweeping away the smoke and blowing over the mirrors.

Thu, 04/07/2011 - 23:59 | 1148481 Bringin It

Not accurate. I'll fix it for you.

Sentiment or social mood drives the fiat, not exogenous events.

In the real world, your list has winners and loosers.

Thu, 04/07/2011 - 23:51 | 1148446 trav7777

dollar is getting blowtorched/monkeyhammered....wow.

Big move for the overnight

Fri, 04/08/2011 - 00:05 | 1148486 Mr Lennon Hendrix

Yawn! [stretch]

Fri, 04/08/2011 - 00:02 | 1148487 Tail Dogging The Wag

$50 /oz before we hit May. Let's get physical!

Fri, 04/08/2011 - 00:06 | 1148498 Mr Lennon Hendrix

Who is May and why are we hitting her?

Fri, 04/08/2011 - 00:17 | 1148538 Misean

Maggie, she wrecks beds, apparently.

Fri, 04/08/2011 - 01:46 | 1148811 Arkadaba

+giggle

Fri, 04/08/2011 - 00:19 | 1148539 BernankeHasHemo...

Bernanke is going down. I want to piss in his face and make him drink my urine. I want to cut out his entrails and feed them to my dog while he watches. I want to cut off his eyelids so he has to watch. He deserves to suffer and die a truly miserable death.

Fri, 04/08/2011 - 00:25 | 1148570 astartes09

Dollar 75.232 and dropping...

Fri, 04/08/2011 - 00:40 | 1148609 astartes09

75.219...

Fri, 04/08/2011 - 00:40 | 1148625 astartes09

75.198...

Fri, 04/08/2011 - 01:27 | 1148773 astartes09

75.189...

Someone seems to want to keep it above 75.20 but they are failing.

Fri, 04/08/2011 - 00:30 | 1148587 Bansters-in-my-...

$39.92 last I looked.

Fri, 04/08/2011 - 00:34 | 1148593 Tail Dogging The Wag

$39.95 /oz

PARTY TIME

Fri, 04/08/2011 - 00:35 | 1148598 lasvegaspersona

Kitco showed an ask of 40.00. It was up for a few seconds at 8:18 PM Pacific. It then dropped back down a few cents. I'm psyched and deeply indebted to AGQ, wooohooo

Fri, 04/08/2011 - 00:42 | 1148634 cocoablini

Excuse me, but a congressional agreement wouldn't be pro dollar either! Shaving a miserable 40 fucking billion off the budget which is 2 trillion a year or more out of whack is total birdseed.
So agreement or not, nothing has fucking changed. So, the overbudget is 2 trillion. The FED is pumping like 2 trillion into the system illegally. The country is hosed.
And if no budget, the banks will first shitcan the dollar to scare congress. Then they will tank the stock market and then people will run to cash and then the dollar moves up again until the banks get their free welfare checks. And if everyone is short dollars, and the market tanks, watch the carrytrade blow up like Japan.
Lack of budget means work stoppage which means less money spent which is deflationary. If turbo tim cannot float new bonds then POMO is fucked and the ponzi machine stops and that is deflAtionary. There is no way the congress will not pass a faux ho budget.

Fri, 04/08/2011 - 00:45 | 1148643 dalkrin

The walls are burning, there is no sun.

This kind of pornography is a matter of artistic creativity.

Vertigo on the silver rocket, good thing I'm strapped in, moonshot pending.

It may be too late to awaken our neighbors, stay tuned at ZH for the wrath of deferred debts.

They're alive, they're human beings!

Fri, 04/08/2011 - 00:46 | 1148647 Bansters-in-my-...

We need "more cow bell"...!!!

Fri, 04/08/2011 - 00:54 | 1148678 astartes09

http://www.youtube.com/watch?v=rBa5qp9sUOY&feature=player_embedded

There you go man.

Fri, 04/08/2011 - 03:18 | 1148967 Hephasteus

Enough cow bell the drama llama's will follow you home.

Fri, 04/08/2011 - 00:48 | 1148648 lasvegaspersona

There will be no more dips....just buy...

The only dip between here and December will be when the Bernack feints a brief backbone and pretends he has any option but to print. That will come in June, on the 30th, it will last 16 minutes, he will admit it was a mistake and immediately announce QE_. Everyone will be encouraged to put their own number in that blank space. It still comes down to this...no politician will allow himself to suffer pain if there is ANY other option. That option will always be the print button. I sincerely believe that most of Congress simply does not undestand. It takes hours to come to understand the problem. The few with a financial background refuse to see. Those without refuse to learn. They have no time to play catchup in learning economics once they hit the big city. They rely upon advisors who either lie or, once again, simply do not know. Picture this...your Congresscritter staying up all night, foregoing a big party, to read zerohedge...can't quite picture it?....neither can I. Just buy, all dips have been cancelled. Sorry.

Fri, 04/08/2011 - 00:53 | 1148661 Itsalie

sokol bought lubrizol for his family, charlie bought byd for himself (he is planning his retirement when he becomes 100 years young), so why won't ben the chopper be buying some silver for his retirement? printing money is good for silver, so he'll just print more

Fri, 04/08/2011 - 01:14 | 1148726 Selah

!!!!!!!!!!!!!!!!!!

$40

!!!!!!!!!!!!!!!!!!

Fri, 04/08/2011 - 05:02 | 1149035 StychoKiller

Ag = $40.19/Toz.

Fri, 04/08/2011 - 01:15 | 1148731 boeing747

Fri, 04/08/2011 - 01:17 | 1148738 john2011neb

So the dollar falling because of the shutdown. I'll bet Ben wished he would have thought of this a long time ago.

Fri, 04/08/2011 - 01:15 | 1148740 john2011neb

So the dollar falling because of the shutdown. I'll bet Ben wished he would have thought of this a long time ago.

Fri, 04/08/2011 - 01:23 | 1148762 Arkadaba

Go out for dinner and what happens??? USDCAD is .9555??

Fri, 04/08/2011 - 01:37 | 1148798 ak_khanna

Maybe a gridlock is a good thing as incompetents doing nothing is better than they doing something and making the situation worse.

The increase in debt ceiling will encourage the U.S. to borrow more money from the world which the likes of Geithner and Bernanke will then distribute it to their buddies, the bankers and the rich corporations / individuals.

They would turn around and use the money to gamble in stocks, commodities and currencies resulting in millions of people pushed below the poverty line as they would not be able to afford even the basic necessities of live needed to exist.

http://www.marketoracle.co.uk/Article24581.html

Fri, 04/08/2011 - 02:15 | 1148858 TexDenim

Reid made a fool of himself on TV. Could chaos and anarchy be any worse? If we could keep up our national defense, the rest of the government could be eliminated.

Fri, 04/08/2011 - 02:25 | 1148876 guasilas

So Portugal goes bust, and the Euro goes up, and US gridlock, so presumably stops spending(ha ha) and the dollar goes down.

Please explain?

Fri, 04/08/2011 - 03:59 | 1148992 savagegoose

this is serious, if the gov shuts down the people will see they dont need so much fucken money, and they'll never get to live it up ever again.

all off the gravy train and start the scare campaigns, our easy living depends on it.

Fri, 04/08/2011 - 04:33 | 1149013 doggings

"Gold is following suit"

only when priced in USD, in EUR & GBP Gold is below previous highs

Silver however is into fresh new territory on all 3 types of quilted 2-ply.

as Turd would say FUBM!

Fri, 04/08/2011 - 05:50 | 1149073 tomster0126

Let's all form a zero-hedge apocalypse coalition and hoard as much gold, silver, and oil we can as we wait for everything around us to fall apart. Then, we'll be kings of the post-apocalyptic world and holder of goods! Lol zoning out a bit but really though who's down?

www.forecastfortomorrow.com

Fri, 04/08/2011 - 06:39 | 1149114 Moe Howard

Gold $1470.0 Silver $40.17

This is not good.

Fri, 04/08/2011 - 06:47 | 1149119 DavidC

I KNOW that the Dow et al are rising purely on the back of the Dollar being trashed, but every fibre of me says to short the hell out of it.

1 - if the Euro and Pound are getting stronger compared to the Dollar, why are their stock markets still holding or going up? Surely they would be the converse of the Dollar (relatively stronger currencies so stocks falling)? I'm aware that ALL currencies are chasing themselves lower, but it's all relativity.

2 - if the Dollar is on its way out, who would want to hold Dollar based assets?

3 - Geither's assinine comment the other day of 'If we were China, we would lend the US money' flies in the face of what any sane person would do, namely cut back on US Treasuries until the yields rise.

Any comments?

DavidC

Fri, 04/08/2011 - 07:17 | 1149170 Absinthe Minded

Good morning and good luck. When I saw the PM prices on Kitco this morning I knew the S was very close THF. I feel bad for the next generation.

Fri, 04/08/2011 - 09:47 | 1149582 r101958

I stated this on one of the other strings too:

Silver and gold will continue going up as long as the fed keeps printing and the gov't keeps spending more than they take in. That is all there is too it. Nothing else. TPTB want to make it seem like a bubble but it is not. If it was then everybody would have it. Check what Mark Faber says in his interview here:

http://www.zerohedge.com/article/marc-faber-everything-going-only-federa...

Also, the gov't cutting 30 or 60 billion will not have any affect, nor will gov't shutdown. To have any affect they would need to cut 20% across the board this year and then again next year. They would then achieve a balanced budget but would still be 14-15 trillion in debt.

Failure To Reach Budget Resolution Sends Dollar Plunging, Silver At New Post Hunt High

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