Kacy I agree with Fats in that I suspect US$ rise is a short...

Kacy I agree with Fats in that I suspect US$ rise is a short covering rally. Time will tell...

From my observations I think that the Fed has been choosing inflation over deflation by their choice of policies so far... However they are going to have to shift in 1 direction or the other and drive that change. They can't prevaricate much longer as there are already high core inflation readings built in for the next few months. IMO Bernanke & Co. view the economy as trapped somewhere between inflation and deflation, a knife edge that cuts deep into their policy options - so they try and talk it in the direction they want it to go..... However with the world facing deflation, it's time for them to show financial leadership and make some tough decisions and drive rather than talk. It's another time will tell...

I think some of the hedge funds will be in overdrive in the next few months and I think it will give the Fed some headaches. I suspect the Fed was very pleased to see the rise in the US$/drop in commodities. And they talked it up.

Just my opinion
cheers
Lekki
:)