Subprime mortgage meltdown

"The regulators are trying to figure out how to work around it, but the Hill is going to be in for one big surprise. This is far more dramatic than what led to Sarbanes-Oxley, both in conflicts and in terms of absolute economic impact." —Josh Rosner, managing director, Graham-Fisher & Company

Since late 2006, 36 U.S. mortgage lenders have gone bankrupt, and there is talk in Washington of possible bailouts. Even GM is taking a hit from its finance division and exposure to subprime paper. And since the Fed can not afford to raise rates right now with the subprime mortgage meltdown going on, the dollar gets discounted.

Gold and silver are selling off as they track the equities, there is a flight to liquidity, but at some point I think the U.S. dollar is going to come under some serious selling pressure, and the dollar and the gold price will decouple. The fed may even have to lower interest rates to save housing, this too will help trigger a gold rush.