Economic outlook

At the end of June, I predicted that the stock market would be up in the third quarter, and down in the fourth. The DOW was up 69 points until today. It should be downhill for a while. The Fed halted raising rated, conceding that raising rates would harm the economy even more than our runaway inflation. (Gas is at an all-time high, and everything I see at the supermarket is more expensive than six months ago.) The DOW was down despite the halt in hikes because the market is afraid that we may have both a recession and inflation. (I think we will.)

I was surprised that the dollar was not lower than it was, but I guess that a rate hike wouldn't have supported it much anyway. My bet is on the Swiss Franc and the Euro over the Yen. Here's my reasoning: I think the French and Germans will try to attack the dollar to make themselves feel important and also because they don't like our support for Israel. I think Japan will devalue their currency as ours falls so that they have a better chance to compete with China. The Swiss Franc has two things going for it. The first is that they have an awesome current account balance in their favor over the past year, and they will continue to attract currency speculation. The second is that their legendary neutrality makes them the ideal currency in a wartime situation.