So far, it’s only talks of increasing rates, but no action from the Fed. I guess they are trying to bluff the dollar higher without actually having to increase the interest rate. I call it a poor poker face, because there is little hope for the dollar long term. […]

What will happen to the dollar is still an uncertainty. No doubt, the bankers want to devaluate the dollar by 20 to 40% to maintain global economic stability. The problem however is how do you slowly devalue the dollar by that much without causing everyone to run to the doors at the same time. […]

The US Dollar on the other hand is getting raped from every angle. US government has talked of strong dollar policies while simultaneously acting to weaken the dollar. To add insult to injury, our Saudi friends have gang banged the dollar with other oil producing nations in a plan to replace the dollar as the currency of choice for oil. The dollar is falling against nearly every currency this AM. Naturally, this goes well for the equity markets and causes the stock market to rally. […]

The first problem that those countries will experience is inflation (for the exception of China). As their GDP blows away other countries they will have to lower rates to keep that inflow of foreign money in check. The only problem is that they tend to do the exact opposite; they will raise rates to fight inflation. So with the higher rates, more foreign investors will seek investments until the market becomes too crowded and collapses. […]

The case for the bull and bears are both convincing. On the bullish side, the real story is the dollar, how it will get weaker to support the equity markets. As long as the rest of the world trade commodities based on the dollar, it will behave inversely proportionate to equities to some degree. On the bear’s side, we just had the greatest 6 month bull market run (sense the last great depression. In addition, the economy is still getting weaker, just at a slower rate. […]