Uncle!

This week's rate cut does make me wonder what's going to keep the dollar from continuing its decline.

Maybe I'm inadvertently calling a bottom here, but I wonder how much longer it is logical to keep hanging on to the dollar. Is it time to say "uncle"?

My answer has been to hedge pretty thoroughly. I've generally diversified my currency positions out of the dollar, although I retain significant exposure to the dollar through stocks.

The dollar could certainly bounce from here, but a rally would be pretty easy to catch.

I'm all about capital preservation right now until we prove that we can hold above 1500.

The good news for people who like to think about nominal returns is that if the current currency declines against hard and financial assets accelerate, we will definitely see new equity highs. The bad news, of course, is that this will be a paper gain, without meaning in purchasing power terms.