Spring of 2007 was a good time.  The flowers were blooming, the trees budding, the stock market was looking to have another good year.  There was one problem, the sinking dollar.  It was a bit inexplicable.  Some felt it was the fed purposely trying to devalue the currency by not openly communicating day after day their intent on a strong dollar policy.  Some felt it was the debt of the federal government and some felt it was the debt of the U.S. consumer.  But all in all, no one knew why. Fast forward to today.  The dollar is nearly impossible to keep down.  We have banks folding on a weekly basis, government intervention in all things financial and then some, stock market in or flirting with bear territory.  So why is the dollar strengthening so?  Will the trend continue?

No one knows the answers to these questions, even if they pretend to on TV.  It is rather interesting to watch it unfold though.  The sinking commodity market coupled with the strong dollar seems like it might be signaling an end to tough times.  Keep in mind, many will point to the inverted yield curve as early as 2006 as a sign that the economy was heading for trouble.  It took over a year for that to play out and it may take us another year and lots of bad news to make it through.