Nassim Taleb Advises ‘First’ Avoid Treasuries, Then Dollar

02-06-2011 • Bloomberg.com

“Euros have Germany, the dollar has nothing,” he said at a conference in Moscow. Taleb made similar comments at the same forum last year, saying “every single human being” should bet Treasuries will decline because of the policies of Federal Reserve Chairman Ben Bernanke and President Barack Obama. Bernanke has pledged to inject dollars into the U.S. financial system and cut borrowing costs by buying $2.3 trillion of Treasuries and other assets, a tactic known as quantitative easing. “As skeptical as I am about Europe, I prefer it by far to the United States,” said Taleb at the conference, hosted by Troika Dialog, Russia’s oldest investment bank. The U.S. is just like Greece, only without the International Monetary Fund to enforce discipline, Taleb said today. Greece came close to defaulting on its sovereign debt last year before receiving a bailout from the European Union. “We have a very dire situation in the United States, and every day that goes by it gets worse,” Taleb said. “Every day that goes by, we’re spending money. We’re increasing that cumulative debt.”