Early this morning, you saw a strong sell off of the equity market and a rebound to the dollar. This however did not last; the market went up the rest of the day while the dollar fell. Looking at the chart, the trend has continued by calling Bernanke’s bluff of a strong dollar policy. If the Fed takes no action to strengthen the dollar, we will continue to see it fall. Naturally, this is exactly what the Fed wants because it will cause the inflation it needs that will give the impression of a growing economy. Evidence of this is the fact that gold barely sold off and is still way over 1100 an ounce.
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