Jack the Pipper

I threw in the Lewitt quote above as a sort of extension to Jack’s Currency Currents missive yesterday. As much as we’re told we need a quick-fix to get the American economy back on its feet, that idea is wrong.

If you have been following this morning missive for awhile you know we’ve been expecting export models to be crushed on the major secular theme of global imbalances starting to balance i.e. overconsumption in the West being balanced against overproduction in the East.

This is that time when we try to evaluate the expectations about the expectations, i.e. will the jobless number guess prove too low, high, or be about right. This morning it seems the number is supposed to come in worse than expected.

US Dollar Index yesterday touched its highest level in nearly three years. Not since April of 2006 have we seen the buck this strong versus this particular basket of currencies.

Another head shaker it seems. Just when we were warming to the idea of gold and the US$ moving arm in arm, the correlation breaks down or maybe pauses or maybe never was; either way we are now back to the old game of higher dollar and lower gold

Worried about your countries currency? The easy solution to your worries: don’t cut rates when the market expects it.

Do we have a dollar breakout or fake out in the making? It depends on the euro here. The European currencies are lower against the dollar this morning on news that Germany didn’t want to throw its hard earned Treasury at central and eastern European problems. 

China bulls don’t worry, be happy, because China is going to be the sole winner in this race to the bottom–don’t you know. 

Inflation is back … but this time it’s a bit different. I’m not talking about the inflation of prices; I’m talking about the inflation of lungs.

Though it is fashion to blame the US for all the ills now flowing into the global economy, we don’t think it’s quite that simple.