Lessee... The fed is printing up money to throw at a bad banking system, while dropping rates at the same time... Not only doubly-inflationary, but a strong signal to banks that they don't have to make the painful changes in their practices just yet, allowing them to drift further down the garden path.

Meanwhile, we have commodity bubbles in Oil, Wheat and probably Corn... Even Rice.... As investors look for something, anything to hide from inflation and cap losses. The market drops on one hand while the dollar drops on the other... Multiplying losses for foreign investors and putting pressure on them to divest both from the dollar and from the US market. The same multiplying effect id hitting real estate.

Middle class wealth is going up in smoke as the two primary vehicles of middle class wealth drop, the stock market (where all the 401ks are) and the value of their homes.

And while foreclosures rise, job losses are starting in as we enter a recession, which will create an amplifying cycle as more people find themselves unable to pay for their home....

A few months ago I was not sure if we were heading for a recession. Hard times, sure. Inflation, sure. A restructuring-under-fire of the international banking and trade system- probably.

Now I'm much more worried. Even if the lower dollar keeps us out of a recession-by-the-numbers, there is such a spectrum of economic pain out there (aimed mainly at the middle class), it won't really matter. Recession, Depression or none of the above, we're hitting a really bad time whose answer will not be found in terms of economic quarters, but more like years.

One more thing about the lower dollar. In order for companies to leverage the advantage of the lower dollar in international sales of gods or services, they have to ramp-up. That takes money, which means debt. With credit tight even for companies with flush balance sheets, thats going to be hard. So that lower dollar may not keep us from recession.

Yeti