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As the New Year approaches the typical topic of discussion is to prognosticate, predict, and further espouse a view of what the future will bring. Our view is not a pretty view, well, certainly not in the short-term, but a view that becomes somewhat less gloomy as the year 2008 progresses.

This week we have the Thanksgiving holiday here in the States. Most US traders take most if not all of the week off. What that means is a significant fall in liquidity. Lower liquidity usually means more volatility so while it is a Holiday, it is not time to lose focus and turn a blind eye towards the markets. In fact, weeks like this often provide better than usual trading opportunities.

Keep in mind that we just had the G20 meeting, which by most accounts turned out to be a "dog pile" on US treasury secretary Paulson. The other finance ministers berated him about the disorderly free fall of the Dollar that he has allowed. Our sources tell us that most of the other ministers left the G20 meeting deciding that they would have to take matters into their own hands since the US is either unwilling or unable to do the right thing. We continue to look for a bounce in the Dollar in the near term as Europe, Canada, and Australia make the necessary adjustments to deal with a Dollar that in the long run is expected to continue to free fall.

Just to be positive, here is some good news--because the US currency has declined so steeply, manufacturing is returning to our shores. Recently, BMW announced that it will beef up its US production of their cars which, this is a switch, will be shipped to Germany and other destinations. Why? Simple, it is cheaper to produce the cars here and ship them where they are needed. The weak US Dollar strategy, a silent one, is reaping some rewards returning some, painfully little, manufacturing to our shores.

As light sweet crude oil prices approach $100.00 per barrel, lunch table conversations could turn from housing related issues to the economics of consumer spending with $100 oil. With $100/barrel oil, will consumers finally hit their threshold for spending and begin to cut back on disposable income purchases in order to fit energy costs into the monthly budget? We won't know what oil price will spark that turning point, but we feel that it may have already started.

We have begun to see the Treasury department act to defend the Dollar. Last week we saw one of the largest infusions of capital by the Treasury in 21 years. While this did not yet turn the tide for the Dollar it is an initial sign that they are beginning to back up there "strong Dollar policy" with actual action. We are far from out of the woods yet, but look for more data as well as this weeks ECB meeting to continue to support the Dollar. The trade in the Dollar has become extremely lopsided and that lopsidedness has lead to at least a short term countertrend in the past.

The markets are rocking: precious metals, commodities, raw materials, energy, interest rates, foreign currencies, the dollar and more are providing opportunities, up and down to the prepared investor. The tsunami of money and credit creation required to underpin the asset-backed economies of the G7 has provided opportunities as far as the eye can see. And the massive sterilization of this same money printing by the emerging world is stoking runaway inflation to surface in every area of the globe and signaling the unfolding "Crack up Boom".

Most gurus and financial experts expect to see another rate cut this coming Wednesday, when the FOMC releases its interest rate decision and statement. While 25 basis points seem to be baked into the market cake already, the possibility of a 50 basis point cut is certainly within the realm of possibilities. That, along with the end of the month portfolio dressing and undressing, should make for a very interesting Wednesday afternoon. Our concern is that this august group of FOMC attendees might forget that a weak US dollar can have a very negative effect in the long-run.

As a blogger, I read a lot of blogs. One of the better blogs I read is www.crossingwallstreet.com, written by Eddie Elfenbein. He is a self proclaimed lover of the stock market because it is one of the greatest inventions of all time. In either case, every other week or so he posts a "stat of the day". This week's stat of the day piqued my interest because it was simply unbelievable; the first day of each month since January 1, 2000 has outperformed the market 15 fold.