With the U.S. dollar at a 14-month low against the Euro, the pressure is on for the European Union to join Brazil and certain Asian economies in helping prop up the dollar.

At the same time, everyone views a devalued dollar as a necessity to address the US trade deficit (more accurately, the current account balance). Such imbalances would naturally cause our currency to devalue relative to our favorite exporters, but everyone tried to keep the unsustainable system going. Massive geopolitical events helped for a while. The sad thing is that we don’t even live in a reality where a significant pickup in US exports fixing the imbalance is even considered an attempt at humor.

The global economic system is so fragile that nobody wants to be on the losing end of devaluation. Not everyone can devalue, though. Sure, they can all try, and commodity prices will spike around the world, but some nations will be net losers (the net lenders of the world).

I am one of very few people that believe the dollar could actually reverse its current decline, at least enough to cause some major damage on Wall St. That was part of my justification for exiting stocks and switching to an options strategy. How’s that working out for me? Not too well, thanks for asking. Did you tell your girlfriend about how you got that rash on your last trip to Vegas yet? Actually, my upside bets are mildly profitable thanks to an absolutely ridiculous Monday. I’m also rather happy that I held on to my GLD. Too bad my downside bets drag me down. The market’s ability to walk sideways for a month has upset and cost me. Oh how I would rejoice if the S&P hit 1150. Sometime before January, please.