With the stunning collapse of Bear Stearns and the Fed's latest move to include investment banks under its umbrella, a total systemic financial collapse has now likely been averted.

And with the latest Fed statement ratcheting up the tough talk on inflation, the dollar may now be close to the point where it will actually be defended.

That's bad news for the commodities complex, especially since its most recent run was predicated on a further drop in the greenback.

So today, traders have sent gold tumbling in the wake of the Fed's latest tip to the markets.

Here's the skinny.

From Bloomberg by Pham-Duy Nguyen and Millie Munshi entitled: Gold Falls Most Since 2006, Leads Commodity Drop on Fed Outlook

Gold plunged the most since June 2006, leading a decline in commodity prices on speculation that the Federal Reserve will ease the pace of interest-rate cuts, boosting the appeal of stocks and bonds.

The UBS Bloomberg Constant Maturity Commodity Index fell 51.7554, or 3.5 percent, to 1,437.64 at 11:42 a.m. in New York, led by declines in silver, gold, wheat, sugar and crude oil. The index of 26 commodities has dropped in three of the past four sessions and is down 8.6 percent from a record on Feb. 29.

The Fed yesterday cut the overnight-lending rate 75 basis points to 2.25 percent, the sixth reduction since September, in a bid to avert a U.S. recession. Analysts had expected a bigger cut to 2 percent, which helped spur commodities to record highs as investors sought a hedge against inflation by stocking up on raw materials.

``Market sentiment has changed to `maybe the Fed can bail us out,''' said Chip Hanlon, who helps manage $1.5 billion at Delta Global Advisors Inc. in Huntington Beach, California. ``It's a great excuse for anyone who's been a part of this commodity run to take some profits. It doesn't mean that people were wrong about the economy. It just means that they went overboard.''

Goldman Sachs Group Inc. and Morgan Stanley, the two biggest U.S. securities firms, said they were borrowing cash directly from the Fed, signaling the central bank's steps to ease borrowing restraints are working.

``There seems to be more stability in the credit market and the Fed keeps coming in to alleviate concern,'' said William O'Neill, partner at Logic Advisors in Upper Saddle River, New Jersey. ‘There's a reallocation of assets taking place. Investors are taking some money out of commodities and gingerly moving in into equities.'"