Dollar, Dollars, Dollars

So I had got to thinking with all this talk of rising and falling dollars about the relation between companies levered to foreign monies, earnings and the Fed Rate. It goes something like this:

As long as companies are doing well (especially the larger, economy driving ones like GE or JNJ or INTC), the Federal Reserve isn't going to raise rates. They want to get a handle on inflation. Understandable. So, a low priced dollar is good due to the fact that this will translate into more Dollars for the same profits in Euros, Yen, etc. If, however, the dollar starts to gain in price, these stocks will then begin to miss earnings. They are getting less Dollars per Euro, Yen, etc. and money starts to come out of the market. This triggers two ideas in Uncle Ben's head: "Inflation is reversing and we're solving the inflation problem we've been so worried about." AND "The market's not doing well and in turn we don't want to level the economy into a recession or start to really shrink our growth so we should be OK to lower the Fed Rate now."

How can you NOT be bullish in this market? The Dollar goes up and you win. The Dollar goes down and you win. I think anyone who realizes this in 2007 will be in the catbird seat for solid gains.