While Bernake and Co. play pattycake with US inflation data, Central Banks around the world (ECB, Japan, China, plus South America) are recognising that the money supply is too loose and are raising interest rates accordingly.
Net result: the US dollar is getting trashed, and frankly it deserves to get trashed.
The Dow Jone Industrials have had a nice rally, right? Well priced in Euros, it is flat to bearish. This is a rally that fundamentally reflects inflation of stock prices...I wonder if that statistic makes it into the core CPI or the bloody PCE deflator??
This is a tacet trade war with the world, and it is not sustainable forever. Real rates are set to rise more, perhaps lots more, whether or not the mad accountants at the Fed can make under 2% of angels dance on the head of a bloody pin.
PS I had a great market day yesterday. While everyone else was getting slammed, I broke even to a little higher for the day...thanks to the bear funds I hedged with on Wednesday.
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