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.

I believe that when the dust settles on the fact that the Fed isn’t going to raise rates, things will have gotten so bad here that the Fed will be entertaining thoughts of cutting rates again!

As I said yesterday, George Soros – the billionaire investor – who “broke the Bank of England” got his “celebrity status” by betting against the British pound…and now he’s looking to do the same thing by shorting the British pound again.

Fed Head Hoenig has thrown a cat among the pigeons this morning by stating that ‘inflation pressures may spur a rate rise by the Fed.’ Hmmm, is he serious, or just blabbering some currency intervention.

With the dollar weakness overnight, gold has bounced back over $5. Oil has pushed back to within spittin’ distance of $119. Could this be the beginning of the next leg up for the commodities against the dollar?

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.

I find it interesting that Big Al is getting testy about all the fingers being pointed at him for this mess. I believe I may have been one of the first to point a finger at him when the housing bubble was getting bigger and bigger. And now…today’s Pfennig!

Seems the markets are getting all pumped up on the Kool-Aid Big Ben is serving up… But these are just words folks… We’ll see who’s right and who’s wrong on this… His track record isn’t so good!