Under Siege

Today's regular unleaded gas price is more than double the price back in February 2001 - $3.14 versus $1.41. Ouch! And when you think about the fact that household debt as a percentage of GDP has grown to over 100%, from roughly 70% in 2001, the picture looks even uglier.

As we see it, the dollar's precipitous decline grows scarier by the day. And the worst part: Rarely do we hear that the dollar is oversold, undervalued or due for a correction.

Unfortunately, nothing seems set to change that. It becomes a game of wait-and-see; wait-and-see how long before the U.S. economy improves and when (or if) the Federal Reserve will alter their course.

When we study all the different elements at play across the board, we believe we are witnessing a currency under siege. Until and unless either the U.S. economic fundamentals improve or the Feds stop their unabated assault on the dollar, upward price action leading to any kind of sustained rally will probably be blocked.