The U.S. dollar rose on Wednesday as news that China would act to restrict redundant investments underscored concerns about a global recovery and tempered the positive impact of data showing a jump in new U.S. home sales.

Gold fell to a one-week low on Tuesday, dropping sharply as the dollar strengthened broadly and crude oil prices tumbled, reducing the metal’s appeal as an inflation hedge.

Gold hit a two-week high above $946.00 per ounce on Friday, extending its gains as the dollar retreated, while firmer oil prices raised its appeal as a potential inflation hedge.

The Swiss central bank just cut back interest rates for the franc. World currencies are in a race to the bottom. Only the U.S. dollar seems suiidally determined to remain high…

How bad is it going to get? Our reference point is the 1930’s and the Great Depression. But people in Russia and Asia only have to recall events of a little more than a decade ago. The “Asian Contagion” actually began in Russia in 1998 when the country defaulted on its national debt. The crisis then hit Thailand and within a year had spread to all of Asia with a few exceptions (Malaysia and China being the main ones).

The base metals were mixed on Friday. Copper pushed above the $4 level in the pre-dawn hours, but once again was unable to hold there, as it fell sharply through the first hour of the New York session, but then came off its lows to finish at $3.9512/lb., down less than 2 cents.

The UK recession will be much worse than most people yet expect, it’s still somewhat controversial to even say that there will be a recession, which means that stocks aren’t yet pricing it in sufficiently.

No other asset class comes close to commodities over the last six years. Not stocks, not bonds, not real estate and not even most emerging markets. In fact, even during the worst credit crisis in the United States in 60 years, commodity benchmarks continue to hit new all-time highs in 2008.