Jack the Pipper

China has reaffirmed common belief that it will continue to press on and realize a legitimate and sufficient recovery. They will retain their position as a global economic leader and in doing so will help out many smaller economies at the same time.

We’ve paid some attention lately to the fact that the US dollar is reacting positively to fundamentals, i.e. negative data is negative for the buck, positive data is positive for the buck.

It may be a stretch to say China is now going to drain massive amounts of liquidity, having to pay penance for the error of its massive stimulus spending and subsidization ways (which it rightly accuses the West of the same).

You’re only as good as your worst player … Or something like that. This is why the euro has been so bogged down by daily news citing Greek [debt] tradegy. Just how badly the rest of the Eurozone is set to perform remains a question.

No one can predict shocks. But the theory of the double dip is very clear in one important respect: Shocks can deal lethal blows to anemic recoveries.

How badly does Ben Bernanke want to keep his job? Frankly, I’m surprised he’d even sign-up for all the responsibilities and criticisms that come with being Fed chairman; just seems like it’s not worth it.

The dollar has bottomed on a multi-year basis after a major test in 2009. Interest rates are going higher as this recovery “normalizes” in 2010; we see 5% on the 10-year T-note before the year is done.

Will the world economy be able to continue its recovery process as global monetary stimulus measures are phased out?

Any dollar bull story must consist of the Mr. Greenback relinquishing its role as carry trade currency i.e. primary major currency borrowed to fund risky asset and other high yielding investments.

Last Friday I penned Growth and inflation? Key to our 10 reasons the dollar has bottomed. I hope you believe me now. One of the key points to the dollar move was “Carry trade idea history.”