Insights

The parallels are many and they are disturbing. Japan's problems started with a sharp decline in Japanese stocks in 1989.

Hank's contention that "country folk" can adjust to their surroundings and survive without the trappings of normalcy applies now to the Federal Reserve (as well as the Treasury).

A lot of investors are losing sleep these days over zero percent yields on their Treasury holdings. It seems we have found the trigger point between fear and greed.

The CNY has been noticeably weaker in December. After spending several weeks around 6.82-6.83, it weakened towards 6.90, before strengthening slightly at the end of last week when the dollar lost ground to most currencies.

Hard times continue to spread throughout the economy, but recent aspirations expressed by government officials could prove to be a turning point both in the economy and the markets.

Since this past summer, USD has rebounded forcefully from a seven-year bear cycle that started in Q1 2002. The global financial crisis has created massive demand for the USD that propelled the currency to stage a dramatic comeback.

In a world of imploding equity valuations and panic-stricken debt markets, currencies have been relatively stable.

Money may make the world go round, but it is confidence that moves money. There is no doubt our financial system operates, or fails, based on the level of confidence placed in the system itself, causing self fulfilling prophecies to wreck havoc in times of stress.