Dollar Problems Become Self-Fulfilling Prophecy

As the Financial Times is reporting, oil topped $100 a barrel and gold hit an all-time high of $861.10 an ounce because investors are spooked over the dollar's weakness. The currency dropped against the euro and yen after a report that US manufacturing is at a five-year low. Investors think that means the Fed will lower interest rates - and mint more money - to compensate, and so they head to buy commodities that you can at least use to heat your home or adorn your wrist. The manufacturing report came from the Institute of Supply Management and is in the "contracting" range, a potential sign of a recession. And it's certianly a lot less messy than reading the entrails of some unfortunate bird. Of course, as oil goes up, pressure on peopel and businesses in this country continues, meaning that additional contraction in spending is likely, which will drive further currency weakness, resulting in even more flight to the gold cost - whether the conventional type or black gold. Confidence in the economy is sounding ever more forced, but I don't see that any presidential candidate will have a solution.