Bernanke and Paulson have been worn down from the one-off situations they have been dealing with, and finally came to the realization that the problem is much more pervasive than previously thought.  Ahoy thar maties… Yesterday was a very volatile day in what has become an incredibly choppy week.

Big Ben signaled to the markets that he was ‘uncomfortable’ with the weakness of the dollar, and the ramifications that a weak dollar has on inflation. He actually blamed the weak dollar on inflation! Whoa there partner! You’re barking up the wrong tree!

Yellen stated that she ‘would be pleased’ if the economy was strong enough to raise rates by year-end. That’s all nice and sweet, Ms. Yellen… But did you realize you would move the markets with that ‘wish upon a star’?

I’m seeing more and more talk/speculation of the Fed announcing an end to this rate cut cycle after cutting rates 25 BPS. Hmmm… Interesting, don’t you think? I mean, come on, when has the Fed ever been that transparent?

We’ve seen this type of dollar frenzy before, but calmer heads have always come back to the table to point out the awful fundamentals that the dollar carries around like an albatross around its neck.

The problem here is that Fed Head Fisher is a Lone Ranger. Big Ben doesn’t share his thoughts, and when the Fed meets later this month and cuts rates, Fisher will probably be the lone wolf on dissenting.

The Japanese yen gained 1.6% versus the dollar yesterday and the Singapore dollar was up 1.5%. Both currencies rallied as hedge funds and other highly leveraged traders scrambled to reduce debts.

Good day… And a Wonderful Wednesday to you! I’m draggin’ the line this morning, so if I seem to trail off at times, it’s simply that I started to nod off while writing! Nah! That couldn’t happen, could it? I guess we’ll see!