And so, as my Thursdays normally go, I was reading my usual back sources for info and came across a quick tidbit that will soon explode into a big deal. We all know that the US has been spending more money than their creditors would like; and we all know that will get to a point where this number is enormous – but this was not to be for several years down the road. There was supposed to still be time to sort it out before the debt got beyond 5,6,7 Trillion Dollars – a highly unmanageable number. Considering that President Obama has been talking so much about paying off his predecessors debt, the one Obama was left with, a whopping 1.5 Trillion Dollar to be exact, we assumed that he (Obama) was on top of the spending thing and cared very much to make sure it did not get out of hand.

Anyway, the report discloses that the US would have issued 7 Trillion Dollars in bonds by the time the current fiscal year ends, which is next week. Which means, while no one was looking, the Fed was auctioning off and issuing bonds so fast, that they managed to raise 7 Trillion Dollars – more than the economies of most industrialized nations produce in a year, and more than half that of the US GDP. At the rate that they are spending, the 12 Trillion Dollar target that was set in February for 2012 would have been exceeded by almost double that number.

Forex speaking, how can a country survive without inflation? The answer is they cannot, and my speculation is that when the next crisis hits – and be warned we are approaching the time when it will – when the economies do double dip in the recession bowl – the US will revert to deflating the debt even though they had promised not to.

The level of spending going on in the US is unsustainable and will only serve to hurt everything in that touches it. The Chinese have reasons to be moaning and the Russians might get their wish of a new world reserve currency to replace the Dollar (they are the only ones who used the word “replace” – everyone else jut says “alternative”) but this will not be good for the world or for the Forex market. The US economic advisory team needs to start cutting back on not only their current expense, but their planned ones as well – the world is getting nervous and when news like 7 Trillion in debt in one year gets the attention it so deeply deserves, make sure you are not holding onto greenbacks.

There was a reason why I love the Australian Dollar, and not because it is one of those high yielding currencies that are reasonably priced and pose minimal risk – ok that is one of them. But today I came across an analyst out of Sydney Australia that seemingly holds the same opinion on the near-term outlook for the Forex market.

Cliff Bennett, Chief economist at Kinetic Securities made a statement which echoes several of my recent posts: “Markets are looking very in tune indeed for further gains, all except the U.S. dollar of course, which could be close to a sharp fall.”

It is gratifying to know that someone who is raking in the big bucks to go on television representing their mid-level firms as if they are Wall Street insiders feels the way I do about the overall trend in the market.

And the fact that he said this on television, rather, the fact that television actually broadcast it is surprising. The mainstream media has been the enabler for the political echelon in recent months – hyping the spin set off by ministers, central bank governors and even world leaders.

In the US, the only news organization that has been reporting the hard facts and not just the after-spin has been Fox.

Ironically, Fox News was the only major news outlet not honored with a visit from President Obama last Sunday – and considering that they (Fox) are the most watched news network, with more than double the viewers as the largest two competitors, CNN and MSNBC, I feel he might have made a mistake.

Mr. Bennett’s interpretation is dead-on. The Forex markets are moving swiftly, and for the most part upward. However, most of this is occurring at the expense of the US Dollar. We saw how even the safe-haven seekers are looking for alternatives, ergo the Australian Dollar’s rapid rise to record levels.

Today we even have the New Zealand Dollar jumping and hitting a new yearly high against the wounded greenback, a jump prompted by the surprising emergence from recession with the announcement of a .1% rise in their GDP. It seems everyone is emerging from recession these days except the US – and this is precisely one of the reasons why people are becoming weary of the USD.

And so, as we await word from the US Fed; as we await the Mahmoud Ahmadinejad UN speech; as we wait to see if Obama can create middle east peace, solve global warming and “reset” the button on numerous relationships – all expected later on today – keep your eyes on the Dollar, but don’t keep your money on it. Don’t say I- and now Cliff Bennett, didn’t warn you.

Trade safe.

The problem with the markets these days is that there is too much information floating around that is not essential, yet holds great weight on their performance. Such information can come from various governmental sources such as a senior administration official or a Central Bank board member. The information can be more optimistic rhetoric than actual fact, and can move investor sentiment in the direction that best suits “their” needs at the moment. This pattern has so far resulted in the prolonged agony of USD traders in specific who look at the numbers and then hear the rhetoric and do not know what to make of it.

I have said over and again that something is amiss. Yes, there are “green-shoots” to look to, but are they weeds or productive growth? Ask any true professional in the industry right now and they will tell you that the feeling is just not right, something does not add up and there is a dark cloud up ahead. But yet, you won’t hear this in the mainstream media or news outlets because their “sources” are spewing fertilizer over every minuscule sign that comes up.

The issue at hand here goes far beyond trust. Politicians and officials have lied to their constituents long before the modern era and they will continue to do so – it is a necessary evil in a democracy that relies on free and fair elections. Everyone who works in government wants to continue doing so and they want upward mobility. As the saying goes, you can’t please all the people all the time, but in politics you can certainly try.

I am still worried about the Dollar in the near term as well as the long term. The stock market is beginning to slow down and we are entering a period which traditionally has been a down period. I know the commercial real-estate burst is around the corner and I know the pressure from China, Russia and the UN will begin to intensify as the year winds down. There is political and social unrest all around and it makes no sense that the markets can sustain a high level of growth. The key in the near future would be to determine if the USD’s safe haven appeal is waning as equities begin to fall. If this does happen, it will be the clearest sign that no matter what spin people put on minor economic triumphs; all is truly not well in greenback land.

Stay tuned……..