I am tired of reading that the dollar's decline is a function of our interest rates and their need to decline further on the short end.
The dollar is a referendum on how badly President Bush, Treasury Secretary Paulson and Princeton Professor Ben Bernanke are handling the housing crisis and the economy. The dollar is a repudiation of their lack of creativity, their inability to recognize that the monoline problem plus the housing losses have eliminated the excess capital the banks have to lend, and their insistence that laissez-faire works when it comes to broken markets.
The dollar's decline is a statement that Ben Bernanke will not do what he said he would do in 1992, which is have the Fed buy the bad collateral that the banks are stuck with.
- OR -
Read about the worst-case scenario for housing, according to U.S. News & World Report.