If the outcome isn’t matching the model based on your assumptions, you might want to check your assumptions.
I don’t understand the oil market, I’ll just get that right out to start. I do think based on the reading I’ve done that the price of oil is declining based on demand destruction brought about by, the high price of oil. Its not just us, its Chindia as well. Is the price of oil going to decline significantly from here, I’ll leave that up to better informed commentators.
As to the dollar, deflation strengthens it. You gotta pay off your debts with suddenly harder to get a hold of green peso like things. Either that or you default. If enough people default then credit creation is halted. Note thats what the fed is fighting and failing to stop, with 2% interest rates. If your economy is dependent on ever increasing credit, merely slowing its growth rate causes the contraction to strengthen which becomes a viscious circle.
