What's Going On?

I am sort of baffled right now. The inflation numbers which the Government released today were higher than expected. The government is going to be borrowing a lot more money over coming months for hurricane related reconstruction. There is a wide expectation that the Fed will slow down on rate increases or stop altogether. So why hasn't the dollar crumbled and gold taken off yet?

Besides the typical conspiracy theories - the only logical thing I can think of is that the market prices based on expectations. Perhaps when more and more inflationary data is released, the expectation arises that the Fed will continue to raise rates or raise rates higher. I do not think this is the case currently - but I don't have a lot more to explain what is going on.

On another note - Motorola's new Itunes phone was released today with Cingular. A sub-note - but this phone uses MicroSD memory. That is the format developed by Sandisk that they own a ton of the intellectual property on and thus they are probably going to be getting some great royalties if the phone is widely adopted and production for the MicroSD chips ramps across the board. Time will tell - but I still like Sandisk and am hoping that I can pick it up later this fall or early next year but at a lower price. A price not induced by poor earnings performance, but a price that is lower due to market sentiment.

Regards,

BG