Today's Outrage: Fear of a Strong Dollar

Updates market data throughout.

The strengthening U.S. currency is depressing prices for commodities, in particular oil (which is priced in dollars) and gold.

Global stocks took a dive this morning, following declining oil prices. U.S. stocks are now joining the slump.

It's one of those catch 22 situations. Fear of the dollar, which is up 1.9% over the euro -- the most since April -- ignores the good news that is reflected in a stronger U.S. currency - namely that the U.S. currency derives its strength from the U.S. economy.

Thanks go to Russian Finance Minister Alexei Kudrin, who reminded everyone during the G8 finance ministers meeting in Italy over the weekend that there is no alternative to the dollar as the primary global reserve currency. Ironic in a way, since Russia has made a big stink about the status of the dollar and joined China in calling for another benchmark.

Deal with it world. The dollar, like the U.S. economy, will not be defeated by the financial meltdown. If anything, the recovery that is underway proves the resilience of America.

As for the dip in oil prices to around $70 a barrel, that's really no big deal considering that oil kept on gaining and more than doubled since March despite declining overall demand. So a correction is overdue.

Too bad for the speculators who had been using oil as a hedge against more declines in the dollar that some thought would result from all the U.S. government stimulus spending.