Premise #3: A Falling Dollar

In March of 2002, I wrote an e-letter entitled "King Dollar and the Guillotine," which as the title suggests was a quite negative view of the future prospects for the dollar. Two weeks earlier, I had written a bullish letter on gold, having been bearish (really more agnostic) on gold for years. Since that time, we have seen gold and the euro rise over 50% from the cycle bottoms in dollar terms. Other currencies have not risen against the dollar at all. The Chinese Renminbi is exactly where it was and has been for many years. Almost three years later, we will review the future prospects for the dollar in this week's letter.

This is the third in a series of letters in which I review my major investment themes. The first two were on secular bear markets and the Muddle Through Economy. You can find them at the archives at www.2000wave.com.

But before we get into such weighty matters, I have had more than a few readers ask me to comment on the upcoming election. Of course, most of them know I am a Texas Republican and have a pretty good idea who I will vote for next Tuesday. They just want me to say something good about Bush or bad about Kerry. I am not above a little partisan politics, having served on the…