Sadly, I find myself with more than enough time to compose yet another Thoughts from the Frontline in an airport, as a flight booking error has me at JFK for six hours instead of fishing in Maine. Details for those interested or amused at the end. But it does allow me to offer you a peek into a very sobering report on how badly underfunded public pension are. The situation is worse than you think. Then we will close with a eye-opening report on China from the gracious Simon Hunt, who is allowing me to reprint his latest missive in toto. You really want to read this one. And we start with this rumor from Reuters, just in. Read this and weep. It comes from James Pethokoukis.

This week we will look at the very long term trends in demographics. I find this whole topic fascinating and one that is fraught with investment implications, not to mention the basic issues of life with which we will soon be dealing.

But first, I want to bring a couple of items to your attention. Last week, I lead off with a few paragraphs from a 1946 article from Life Magazine talking about how we won the war in Europe but were losing the peace. I was not trying to make some comparison between Iraq and Europe after their respective wars. I clearly know the situations were, and are, radically different. The success in Europe in no ways predicates success in Iraq. The point I was trying to make was that the press coverage was similar: focusing on the more emotionally impacting negative aspects of the events rather than the more mundane successes.

This week, it is hard to sit down and think about anything other than Iraq, especially given the circumstances in which our troops and those of our allies and the citizens of Iraq find themselves. Our prayers are for all those and their families involved. Last week, I wrote that it was likely that the war would have begun before the next weekly letter. I hope that next week's letter finds the war is over.

Each week, I typically sit down at noon on Friday to write this letter. Quite often I stare at a blank screen pondering what to write about. Last week, and this week, my task has been to decide what NOT to write about. There is just so much that is worthy of our attention: pensions, indexing, Iraq, the drop in gold and the rise in stocks, international turmoil, the misleading headlines in the investment media and more. I have to leave the office without fail at 5:30 (kids come first), so let's see how much we get covered.

Every week, as I sit down to write, I think about the scores of research reports and articles I have read in the past few weeks. Is there a new theme? What trend is developing? What is the picture coming into view from the pieces of the puzzle at which I get to look? What have I seen that I should bring to your attention?

Usually one or two things jump out, and this week is no exception. A number of articles, all about the dollar, and when taken in concert, are beginning to concern me. The developments in the dollar are the most serious threat to my view of a Muddle Through Economy and Market. This is important for you to understand, as it could have a profound affect upon your investments. We will look at these in depth.