Don't Let Dollar Issues Outweigh Fundamentals

The thesis: no more rate cuts, dollar gets stronger, gold therefore gets hammered and energy prices, relative to the dollar, go down.

So trash everything but the winners in a strong dollar environment: the financials and maybe the retailers. Oh, and forget the economy, because what matters is the dollar and the strong dollar coming from the Fed not cutting means that you need to short everything that moved up when the dollar went down.

We have to understand that's the nature of this market.

I want to, with the case of gold, make a stand right here. I have been buying on the way down, but the decline is so breathtaking as to make me feel it has been way overdone.

Now, throughout this whole remarkable commodity run, the unbelievable, breathtaking advance, we have had vicious selloffs based on a sense that the dollar was done going down or that we are going to have a recession that will wreck commodities or that China is slowing or that there's way too much capacity coming on or that demand is weak.

Blah, blah, blah.

I am reiterating that the Fed is not the the reason why the dollar is going down. It is a reason, but far more important are our ridiculous budget and trade deficits and our incredible printing presses.

The earnings will be in the commodity businesses, not the banks or the domestics.

There is a world food shortage. There is tremendous gold demand. There is an energy shortage.

It's important to remember the fundamentals on days like today so the thesis of a strong dollar doesn't overwhelm them.

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