I have been moved to this because never has so much seemed to ride on a single decision of a single body.

So now we wait breathless with anticipation as the Fed ponders it next move.

But the question of whether to pause or not has seemingly been answered this morning as a light jobs number and higher unemployment has, in the view of many, given the fed the cover he needs to take a breather.

Fed Fund 5.5% August futures crashed 26 points this morning on the news. And at present these futures now stand at a paltry 18% chance of a 25 basis pt. hike at the August 8^th meeting.

Renowned bond guru, Bill Gross, went even further when he commented to Reuters that, "the Fed will definitely pause on Tuesday".

For those of you that may be unfamiliar with Bill, he is something of a modern day E.F. Hutton. When he speaks people listen.

The markets -- naturally -- rallied on this premise and have continued the move that gained strength last week as the second quarter growth fell short of expectations at only 2.5%.

This backwards calculus has energized the bulls and given them hopes that the promised "soft landing" is upon us. This they believe will cause the fed to take a break.

This view gained further strength on Monday as San Francisco Federal Reserve President commented the current fed funds rate is "in vicinity" of the right level even though news on inflation has been "disappointing."

All of these factors have combined to move both the stock and bond markets higher. In fact, the yield on 10 yr notes fell an amazing 11 basis points on this mornings news and the stock market powered to 2-month highs. Clearly the markets liked the news.

But while the likelihood of a Fed pause was cheered by the street the dollar bulls were less euphoric.

A probable Fed pause, in fact, turned out to be gloomy news for the greenback as the dollar immediately fell on weakness against the euro and the yen.

These markets fell as they digested they the idea that the Fed may be unwilling to defend the dollar. As a result the market seems to have shifted back to the dollar bears.

In fact, John Taylor, chairman of FX Concepts Inc, a New York firm that manages $12 billion dollars in currency has predicted that the dollar will return to its record low of 1.3666/euro set in December of 2004.

In the short term dollar weakness leads to more expensive imports. Our trading partners, after all have to hike prices to make up for the declining value of the dollar.

This, of course, leads to higher inflation at home.

And inflation is the last thing the world wants to hear about the dollar.

It is after all the rest of the world that has funded our oceans of debt by buying dollar denominated investments- particularly bonds.

According to recent data Japan alone holds $639 billion in U.S. Treasuries. They are followed by China at $323 billion and the oil exporters at $99.1 billion. These figures represent nearly half of all publicly traded Treasury securities.

On top of all that foreigners own a staggering 25% of the corporate debt and mortgage backed securities.

For these investors high inflation is simply unacceptable as inflation erodes the very value of their portfolios regardless of their yields.

Recent CPI data, in fact, points to this very scenario as second quarter inflation came in at 4.1%.

This may not seem like much, but 10 years of inflation at this rate diminishes the value of the dollar by 35%. .

The real truth on inflation is that it could be much higher.

The Fed after all has changed the way it measures inflation over the years. The effect, some say, has been to dumb down the numbers to make them less threatening than they may actually be.

Additionally, the U.S. Government has powerful motives for significantly understating the rate of inflation since many of its entitlement payments are directly tied to CPI. As such higher inflation figures would have tremendous economic and political ramifications.

Because of this some actually estimate that the real inflation rate is as high as 8%!

This figure does not actually surprise me. In fact, it should surprise no one since everything that we buy seems to cost a lot more.

Think about it......gas...more...housing ...more....milk...more......education....more...chicken...more...dentist...more and on and on it goes. You get the picture.

With flat income growth it is no wonder that the savings rate has been negative for the last fifteen months.

Our foreign friends, of course, can see this also and have good reason to be nervous about their dollar holdings. A pausing fed can only makes them feel even less confident.

And once the rest of the world loses confidence in the dollar the consequences can be dire.

Interest rates would surge. Import prices would rise and inflation would continue to grow. The economy would in turn slow down dramatically.

The result could be a return to the stagflation that pushed us to the brink in the 70's.

I don't know about you but the misery index is something that I'd like to forget.

For U.S investors this scenario spells a change in strategy away from dollar denominated assets. In short into foreign markets and into gold.

Gold, in fact, traded higher in response to the likelihood of a fed pause. This trend should continue as it becomes more apparent that inflation is a real and growing concern. A weakened dollar can only push this trend further upward. Tuesday's decision should give this market more clarity.

But in the absence of an actual decision bulls and bears of every type can only speculate.

Whether our own prospects point to either sadness or euphoria, for now, we all have to wait in our own respective corners

So here we all sit...like a collection of misfits...waiting for the smartest guy in the room to throw us a bone or a place to hang our hats.

It seems silly really...but the consequences are all too real.

I, for one, would rather depend upon the red wheelbarrow.

- Steve Christ