Have the markets already gone through their inflationary melt up phase? Are they now giving way to debt deflation, in which cash is hoarded and the price of all assets (tangible and otherwise) falls? Well…no.

The dollar has taken a break from its recent climb. It fell 0.5% against the euro this morning in European trade. Nevertheless, dollar strength is big news these days. Could the US downturn be bottoming just as Europe falls into recession?

The federal budget deficit hasn’t received a lot of press lately, what with all the worries about the U.S. financial system, the home mortgage market, and the rescues that might be necessary to save both.

Bill Bonner says that, although we look at the likes of Zimbabwe with incredulity in the US, we are heading down a similar route with the nationalization of mortgage giants Fannie Mae (FNM) and Freddy Mac (FRE). So much for the biggest ‘free market’ in the world…

Your humble editor is skeptical that this latest financial rally will turn out to be anything of substance… except another shorting opportunity when the time is right.

A true contrarian investor is always looking to own shares of companies that are out of favor with the investing public. And no sector has been more discarded than real estate…

Much of the recent drop in oil prices is due to the rally in financials, says Byron King. But the black goo is still double the price it was two years ago. Worse still, the US is now coping with chronic inflation. Precious metals are the best way to your savings and purchasing power…

One of the best ways to invest in Americans’ reliance on eggs is through Cal-Maine Foods, Inc. (CALM). The company produces almost 15% of the eggs eaten in the US. Its market share is growing. And it has a rock-solid set of financials…

Tom Dyson says the best way to protect your portfolio from the fallout of a failing Fannie and Freddie is to invest in high-dividend stocks…

The machinations of the US Federal Reserve are uppermost in the minds of investors — and the media. The Fed is in a jam. On the one side slowing growth and the specter of the credit crisis. Rising inflation on the other.

Are US stocks due for a rally? Don’t count on it, says Rick Pendergraft. More bearish movement is likely. Take steps to protect yourself.

“Two-hundred dollar oil would break the back of the global economy,” Adam Sieminski, chief energy economist at Deutsche Bank AG (DB), told Bloomberg News in an interview yesterday (Wednesday) in Tokyo. “Next step after $200 would be global recession and bad news for everybody.”

S&P’s/Case-Shiller’s index of housing prices in 20 major US cities fell by a record 15.3% year-on-year in April, the steepest drop since the began collecting data in 2001.

Bill Bonner in The Daily Reckoning takes on the Fed’s big dilemma. How can the it simultaneously fight inflation and deflation of asset prices?

“A very nasty period is soon to be upon us — be prepared,” reads the latest release from the Royal Bank of Scotland. Its hotshot credit analyst Bob Janjuah predicted a 22% crash for the S&P 500 by September… “The Fed is in panic mode.