The U.S. dollar last week appeared mercifully to end its plunge. World markets cheered, and the immediate financial crisis in the U.S. abated. But this week the dollar is retesting all-time lows versus the euro and yen, and commodity prices, capital flows, and trade remain vulnerable to its movements. Inflation in dollar-linked China is rising fast, and an over-strong yen could thwart Japan's recent recovery after its painful 1990s deflation. In the U.S., currency swings are destabilizing the economy and fueling anti-trade populism. After a decade of wild instability, it's time to rethink global currency markets and monetary policies.

How did we get here? After the global inflation of the 1970s, the currency interventions of the late 1980s helped push the value of the yen ever higher, and Japan slid into a long deflation.

Higher-yield bond funds run into trouble

In one of the more spectacular meltdowns in mutual fund history, Schwab YieldPlus - marketed as a higher-yielding alternative to money market funds - has plummeted to just $2.5 billion in assets from more than $13 billion in May.

Schwab YieldPlus is not the first but is by far the largest ultra-short-term bond fund to run into trouble as a result of its exposure to subprime and other mortgage-backed securities.

Real Estate Uncertainty Sparks Boom

With interest rates rising, the share market falling and uncertainty plaguing the real estate market, real estate agencies and franchise groups are spending more money on relatively affordable online advertising. This shift is bringing new revenue to popular New Zealand real estate website—allrealestate.co.nz.

According to US-based classified advertising expert Peter Zollman, executive editor of the Real Estate Advertising Report, a similar shift is taking place in the US, where the economy has been troubled for several months. .

Tug of war on Wall Street

If you've been pessimistic about the stock market, you would think you'd have plenty of reasons to gloat today.