This last years stock rise has been accompanied by a strong dollar on the "strength of the U.S. economy".
Part of that strength has been due to the energy self sufficiency that the U.S. has attained, and the weakness in the rest of the world economies. Namely, China and Europe, as well as much of S. America.
But low energy prices may be a boost to the world economies in the same way we expect it to boost the U.S. economy. If the rest of the world picks up the pace, can we expect their currencies to appreciate like the dollar has lately? And if so, the dollar must weaken, as it is the currency that all of the rest are denominated in.
Is this how the currency war ends. Our markets have been "the best of a bad lot". And if money flows the other way what happens then.
This is another argument for gold. And real assets.
As I write, Peter Vookbar, (sp?) is talking of the need for the Fed to raise rates.
If they have to defend the U.S. dollar how would that be good for the U.S. economy if growth is the metric used. And how would the U.S. govt. do with rising interest rates?
Oh, by the way, I am picking a bottom in Freeport McMoran (FCX) here. Bot some. I think oil may have just bottomed as well. With the currency thing and oil over sold it may be time.