DXY – NYBOT Dollar Index (Last:104.54)

Although my deflationist outlook has kept me bullish on the dollar for decades, the two charts shown in the inset suggest that the greenback’s implied surge to punitive heights – for debtors — lies well down the road. It also seems doubtful that this will occur simultaneously with a leap in rates on the 10-Year Note, since they could not likely exceed the 5% heights achieved last October without sending the global economy into a tailspin. More likely is that the dollar will strengthen with real rates falling. For now, though, expect DXY to continue scuddling sideways between 100 and 110.