Dollar = Confetti redux
Ask 10 different people whether a falling dollar is good or bad, and you'll probably get 10 different answers. But frankly, I share the opinion that no country has devalued its way to prosperity. And the falling dollar is fueling plenty of inflation, even if the CPI doesn't capture it. Indeed, anyone who claims $95 oil or $800+ gold has nothing to do with a plunging dollar should have his head examined.
The bonds remain a conundrum, to be sure, with long bond futures up about 12/32 at recent prices. I don't really "get" why investors would be willing to hold long bonds when money supply the world over is soaring, and commodity prices along with it. I also don't get why foreigners would be willing to keep loading up on our bonds given the pasting they're taking due to the dollar decline. I guess it's the whole "the credit markets are blowing up, so we want safety" trade writ large. But eventually, someone is going to have to pay the fiddler for all this money pumping. My two cents anyway.