One does not even need to look at daily record gold prices to grasp the accelerating dollar credibility loss. A better proxy might well be the plunging assets at money market funds: in the past week these saw a massive outflow of $37.9 billion, which represents a drop of 1.5% in total money market assets. Even scarier is that this is almost half a trillion, or $456 billion in YTD outflows. From the peak, current MM holdings have declined by 28%, or over a $1 trillion. Speaking of losing credibility, the "money on the sidelines" argument is promptly losing it as well. Yet ironically even as half a trillion in cash has been pushed "elsewhere", the dollar, on both a relative basis (FX), and due to ongoing deflation, has continued to gain strength. US consumers have once again listened to the propaganda media and lost: whether it is due to the slow and unchanged grind in all asset classes over the past 6 months, or the sudden, massive losses from the flash crash. Either way, with gold at an all time high, we now know where some or all of the $134 billion differential between MM outflows and all other fund inflows, has gone.
Total MM holdings:
Total fund flows YTD, per Lipper/AMG: