This is more a case of investors pouring money into the Japanese economy than a case of investors scooping money out of the U.S. economy, ... The dollar is weak against the yen, but strong against almost all other currencies, which suggests to me that it's speculative money flowing into Japan.

It strikes us both as brave and foolish to look for an improbable rate hike at this particular meeting.

Assuming that most of this windfall for producers will initially be saved, there also is an implicit demand for U.S. securities.

Rising inflation will prove to be the starting point for the undoing of the domestic economy.

We call this process the Death Spiral.

Strong economies and low inflation may not be inconsistent anymore.

The perception is that rates are going up, and people are lining up to buy homes because of that. It's not a matter of if, but when the Fed raises interest rates, and that's going to have some effect on spending patterns.

The catastrophic destruction of wealth than began in January 1990 has left assets ? equities and real estate, mainly ? deflated against a mass of liabilities that are mainly bank loans.

I certainly don't see this as the beginning of the end for the U.S. dollar and I don't see this as the beginning of the beginning for the Japanese economy, either. A stronger yen is going to slow the Japanese economy down and a weaker dollar isn't going to have an enormous impact on the U.S., so it's not a major concern at the moment.

The growing perception is that Japan is falling back into a dark hole of recession again.

With less credit available, less growth is possible. So we are looking at a bad situation here that we fear can only get worse.

Rising energy prices will further subtract from already-falling real income growth in Japan. In our view, a one or two percentage point subtraction from the growth rate of consumer demand at the margin will prove catastrophic to all hopes of substantial economic expansion.

It's not so much a matter of if, but when rates will have to rise. There's a distinct possibility that if we see more evidence of strong growth, the Fed will move sooner rather than later.

One-third of the widening of the deficit is the oil bill, and aircraft sales explains most of the rest. It's a little superficial.

All this mayhem is very similar to what we have seen in Latin America and in Asia in recent decades. It is driven initially by inflation. This is what China must act to contain. So far, it has not. So the odds of a hard landing remain high.

On this assessment, rates ought to stay unchanged for a very long while.

We do not see any fundamentals strong enough to keep it up there --unless there is a lot of intervention with other governments joining in. We expect the move will fail.

European growth is projected to average less than U.S. growth for a tenth consecutive year.