No, you didn’t read that headline wrong. According to Forbes.com, the $700 billion price tag on Hank Paulson’s bailout plan for the US financial markets wasn’t based on “any specific data point.” It just seemed like a nice big number. This from Forbes, Tuesday:

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

The $700 billion dollar figure may have been plucked from nowhere but, according the The Wall Street Journal, it may be the “greatest trade ever“. Here’s why:

It’s not without risk, but the Feds, with lots of levers, can and will pump capital into the U.S. economy to get it moving again. Future heads of Treasury and the Federal Reserve will be growth advocates – in effect, “talking their book.” While normally this creates a threat of inflation and a run on the dollar, and we may see dollar exchange rates turn south near term, don’t expect it to last.

First, with Goldman Sachs and Morgan Stanley now operating as low-leverage bank holding companies, a dollar injected into the economy will most likely turn into $10 in capital (instead of $30 when they were investment banks). This is a huge change. Plus, a stronger U.S. economy, with its financial players having clean balance sheets, will become a safe haven for capital.

Europe is threatened by an angry Russian bear. The Far East, especially China, has its own post-Olympic banking house of cards of non-performing loans to deal with. Interest rates will tick up as the economy expands — a plus for the dollar. Finally, a stronger economy driven by industry instead of financials means more jobs, less foreclosures and higher held-to-maturity payouts on this Fed loan portfolio.

You can slice the numbers a lot of different ways. My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion – the greatest trade ever.

Note that first sentence: “It’s not without risk, but the Feds, with lots of levers, can and will pump capital into the U.S. economy to get it moving again.” It should send shivers down the spine of investors holding dollar assets.

According to Rude Awakening editor Eric Fry – and we think he’s bang on the money with this one – investors should “Sell the dollar, sell the dollar, sell the dollar“…

The U.S. Treasury will absolutely, positively increase the money supply to rescue the financial system…Which means investors must try to protect themselves against an almost certain inflation.

So what’s an investor to do?

Sell American stocks, bonds and currencies; buy foreign stocks, bonds and currencies. And, of course, buy commodities.