Bears, be very cautious.

This is still a dollar play. What is the most easy way for central banks (not just ours) to manipulate a dollar driven market? Manipulate the dollar because they have the ability to buy and sell billions of dollars to drive the dollar one way or the other. We have seen it done many time during this several month rally.

The FED and our government can’t handle a strong dollar. It would drive interest rates up and that means interest on all that short term debt we have moved nations to from long term would go up and up and up. Interest on debt could become a major part of the budget and trigger the need for more borrowing and higher deficits.

The FED will use other central banks to help them if need be to reach their goals. While I can’t say for sure what their long and short term goals are, the fact that a strong dollar hurts any economy recovery chances, and adds to interest on debt and higher budget deficits, it has to be in their minds.

I don’t believe the bulls or bears can count on anything with a corrupt government and manipulated markets that is made easy with the carry trade they created. That carry trade means changes in the dollar drives markets and that is one thing the FED working with other central banks has a great influence on.

(now, I bid you good day as I am off to check into the hospital for some surgery tomorrow)

- JanPaul

Related Posts:

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• The risky derivatives market is still alive and possibly worse than before this crisis.
• Between stocks, gold, and US $$$ — Somethings gotta give eventually
• Taking money from the Fed and our future.
• JPM says it will hire 1,200 loan officers.

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