Economy- Economic News: The Fall Of The Dollar And The Rise Of Oil

Do you remember last summer when oil surged and the greenback got pummeled? Get ready for Groundhog Day the sequel.

Last week the dollar had its worst week since 1985 as the Federal Reserve Bank found another trillion dollars burning a hole in the taxpayers’ pocket. Don’t expect the dollar’s fate to improve this week as it’s Turbo Tax Tim Geitner’s turn with the credit card. It is expected that that Treasury will create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks’ books.

Printing all of this money for the $700 Billion TARP, $787 Billion Stimulus, $1 Trillion Government buy- back of debt, $410 Billion Omnibus bill with 9000+ earmarks and now another $1 Trillion for toxic back assets has to dilute the dollar.

Investors might be wise to put some money to work in ProShares DB US Dollar Index Bearish (UDN) (UDN rises in value as the dollar falls) and iPath S&P GSCI Crude Oil Ttl Ret Idx ETN (OIL). More aggressive investors might short PowerShares DB US Dollar Index Bullish (UUP) and use the proceeds to invest in Ultra Oil & Gas ProShares (DIG). DIG seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Dow Jones U.S. Oil & Gas Index.