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Archive for December 14th, 2008

Parity - US Dollars Not Accepted
Image by Ian Muttoo via Flickr

Bill Luby at Vix and More seems to be stealing all my post ideas, but I’ll go forward with this one anyway.  Damn you, Bill!

In any case – like Bill, I’ve been spending time looking at the correlation between the US Dollar and Oil (and commodities in general).  Here’s a chart:

dollar-oil

That’s the US Dollar at the top, followed by the Oil index, followed by the 100-day correlation of the two.  Almost perfect anti-correlation.  So, with that in mind, I’m watching commodities right now – and also taking a look at FXE as a way to play the dollar.  And, as Bill pointed out, I wonder if this is a strong sign of inflation reemerging due to the endless dollars we are printing to fund Bailout Nation.

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