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<p>[QUOTE=&quot;InfleXion, post: 1309000, member: 29012&quot;]I agree with you to a point. I think the dollar will gain in strength, but not for the same reasons, rather because it will be seen as safe haven from the European situation. It&#039;s not like Japan is any safer with the worst debt/GDP in the world, and the Swiss franc is tied to the Euro now too. Also, as soon as QE3 happens any dollar strength will get hit hard. That&#039;s not to say QE3 has to happen, but it does have to happen if the Fed doesn&#039;t want deflation which would most likely lead to the money supply shrinking as you&#039;ve described. Were this to be the case then the financial giants would not survive, and I think they would take the dollar with it. The thing is, they are all leveraged something like 50 to 1 against their assets. That means it only takes a 2% deflation for them to get wiped out. I highly doubt the Fed will let that happen to their primary dealers.[/QUOTE]</p><p><br /></p>

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