Today started out strong and stayed positive all day, even if some commented that the highs were not held. The weak dollar helped commodities and helped stocks. A 10.1% October sales rise by the National Association of Realtors by those trying to get the home buyer tax credit didn't hurt either. Ditto for a reiteration that the recession is over.

Here were today's unofficial closing bell levels:

Dow 10,450.04 +131.88 (1.28%)
S&P 500 1,106.13 +14.75 (1.35%)
Nasdaq 2,175.96 +29.92 (1.39%)

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As America's debt continues to grow, is it causing foreigners to think twice about investing in America? The U.S. has been one of the most stable countries over the past century. It has remained stable through two world wars, numerous administration changes and economic and political crisis around the world.

But America has been borrowing more and more money and has a debt that is approaching $12.1 trillion. Countries do fail because they spend too much and ultimately try to print their way to success.

The dollar doesn't buy what it used to, especially if it's something made in another country. When the dollar is weak, imports cost more because it takes more dollars to buy a foreign product. And the weak dollar is just the way our government likes it.

That's because the other side of the dollar bill is that when it's weak, U.S. products become cheaper for other countries to buy. While China is having a resurgence in its economy, it will buy more goods and services, many of them from the U.S. Our stuff is a bargain because it doesn't take as many renminbi to buy dollars. U.S. manufacturers take their renminbi, buy dollars and repatriot the money. They still make the same profit on the product and enjoy stronger sales, due to the weak dollar.

Wednesday, the Fed announced that interest rates would remain at zero to 0.25% for at least the next six months.

The Fed statement read as follows: "weak conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The only change in the Fed's policy was a tweak in the amount of corporate debt that the Fed intends to buy.

The US dollar is cascading downward. This move is causing banks, especially central banks, to shift reserves out of the dollar into the euro and yen.

A Bloomberg survey reports that policy makers boosted currency holdings by $41.3 billion dollars in the last quarter. Nations reporting currency breakdowns put 63% of this new cash into euros, and yen. The dollar's share fell to 37% from 63% in 1998.

How is this affecting the dollar on the commodity futures markets? The dollar fell to 75.77 last week on the Intercontinental Exchange Inc. (ICE). This is the lowest level since March 4th, when it was at 89.62 (The dollar is traded against a basket of currencies.)

Gold futures are on a tear this morning. December Gold traded at $1012.40 per ounce then fell back to $995.20 (prices as of 11:00 EDT). December silver reached an eleven month high, trading at $17.015 per ounce, then falling back to $16.145 per ounce. The other precious metals also traded higher. October platinum traded at $1278.90 per ounce up $30.10 and December palladium was trading at $293.00 per ounce, up $4.35.

The main culprit was a weaker US dollar. The December US dollar traded at $76.715 down .275. The dollar has declined steadily for six consecutive days.

Don't be deceived by the short-term performance of United Technologies (NYSE: UTX). The weakness of the dollar in the second quarter helped push shares of this multinational manufacturer higher. But these gains merely allowed the company to recover big losses sustained during the first quarter of the year.

The double whammy here for investors is exposure to the aerospace industry. As described previously, the weakness in the airline industry will negatively impact revenue for those companies providing equipment to the space. In addition, reductions in defense spending will also negatively impact UTX.

We are in the early stages of seeing change in how this company operates in the current environment. There is no catalyst for this stock to go higher, and shares are vulnerable to the extent the dollar strengthens. I would sell UTX.

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Reuters reports that Treasury Secretary Hank Paulson is in the middle of oil country -- Qatar -- talking about how a strong dollar is in the U.S. interest. With the dollar down 72% since January 2001, it would be nice if Paulson would use his power to strengthen the dollar.

Unfortunately, he doesn't have enough power or chooses not to use it. The power to influence the strength of the dollar resides in the Oval Office. With a $410 billion budget deficit, $9.4 trillion in government borrowing, and interest rates that have dropped from 5.25% to 2% since August, it's not a big surprise that the dollar is so weak.

And since oil is denominated in those ever-weaker dollars, the price of gasoline tops $4 a gallon -- a big "surprise" to the Oval Office occupant. Nevertheless, this is great news for Qatar and its neighboring countries. Our leaders are protecting the interests of those Middle Eastern countries -- both through military policies and economic ones -- while talking about a strong dollar.

Those countries have outsourced their military defense to the U.S. And the rest of us are paying the price.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Oil prices rose to new highs today, with crude moving up as high as $103.95 earlier in the session, before cooling off slightly. Prices are now trading at $103.36, up $1.52.

There are two main driving forces today that are pushing prices higher. The first is the continued weakness of the U.S. dollar, and the second is the general consensus that OPEC will decide to leave output unchanged at this week's meeting.

First, taking a look at the dollar, today it hit a new record low versus the euro. The dollar continues to suffer as world markets prepare for a possible recession hitting America this year. With America's economic slowdown on traders' minds, the dollar continues to fall as many expect that the Federal Reserve is going to be forced to cut interest rates even further to keep the economy moving. Of course, any rate cuts will only further weaken the already struggling currency.

Is the declining dollar just a longer cycle than we have seen before or are there fundamental global economic forces at play, and why? How did we get to where we are now? What does the future hold? How are emerging markets like Brazil, China and India affecting the current situation?

It's not just a longer cycle. Since January 2001, the dollar has lost 64% of its value relative to the euro. There is a conscious U.S. policy to aid companies that export and to help the oil industry – since a weaker dollar causes oil prices to rise.

How did we get to where we are now?

The mechanisms for weakening the dollar are the opposite of the ones strengthening it. U.S. policy was to increase debt -- it sits at $9.4 trillion -- to cut taxes by $1.3 trillion, thus boosting the Federal Budget deficit, and to spend a huge proportion of the Federal budget on wars -- $2.4 trillion worth. If an objective credit analyst were to scrutinize the U.S. balance sheet, it would conclude that it was in bad shape – not unlike third-world countries in the late 1970s. Thus the dollar is not seen as a good store of value and it has plummeted in value.

BloggingStocks readers and AOL Money & Finance visitors have spoken, and below are the Best & Worst of 2007. (See the individual posts for full results.)

Company of the Year: Google, internet search provider turned diversified services giant, received 51% of the vote, beating such strong contenders as Apple and Coca-Cola.

Hottest Gadget of the Year: After all the hoopla surrounding the launch of the iPhone, it's no big surprise that it tops this category, with 47% of the vote, besting second place finisher the Nintendo Wii.

Dumbest Celebrity Feud: Rosie O'Donnell's squabbles with Donald Trump (and also with Elizabeth Hasselbeck) garnered 66% of the vote, easily beating out the back-and-forth between Britney Spears and her ex, Kevin Federline.

Hottest Car of the Year: The Cadillac CTS led with 43% of the vote, easily beating the BMW M3 and others in this category.

Dumbest Moment in Business: JetBlue's stranding of passengers on a cramped, grounded airliner for hours netted 51% of the vote.

The dollar has once again set a new record low against the euro today, with the euro moving as high as $1.4966 earlier in the day. In Asia, the dollar also fell sharply, falling to below 108 yen, marking a two and a half year low against the yen.

The dollar has definitely been in trouble lately. The current slide really gained steam back in August as the market started to realize the effect the subprime mortgage crisis was going to to have on the economy. The dollar has been in a literal free fall ever since.

The dollar is not only reacting to the mortgage concerns, but recent interest rate cuts by the Federal Reserve are also adding to the dollar's weakness. So far this year, the Fed has already cut rates twice, and as Wall Street continues to gauge the impact of the mortgage crisis on the overall economy, analysts now expect to see at least one more rate cut in the near future.

Inflation is above expectations, and it raises a question of what the Fed should be doing. Bloomberg News reports that the Consumer Price Index (CPI) rose 0.3% in September, compared to the 0.2% rise economists expected. And according to Reuters, the Producer Price Index (PPI) was up 1.1% -- way ahead of economists' projections of a 0.4% rise -- creating a tough problem for the Fed.

Will the Fed derive comfort from the core PPI figure, which was up 0.1%? It seems to pick numbers conveniently -- such as the 1.8% August rise in consumer inflation net of food and energy prices -- that give it comfort. Or will it view the 1.1% rise as another indicator -- along with the 4.1% rise in labor costs -- that inflation is out of control.

Why do we have a Fed anyway? Is it to bail out Wall Street through an unexpected 50 basis point rate cut? Or is it to keep inflation within a 1% to 2% range? I think the Fed is leaning towards bailing out financial markets rather than controlling inflation.

Oil prices have continued to climb today, and are currently (10:30 a.m.) trading up $0.83 to $83.71. Earlier in the session, it had looked as though profit taking would drive prices lower, but that sell off was only momentary and supply concerns along with weakness in the U.S. dollar have once again led to price gains. Update: by the end of the day, oil had reversed again to close at $81.66.

There are several factors that are leading to the recent run up in oil prices. I have looked at these a few times over the past few days, and they remain the same; upcoming winter heating months, geo-politcal unrest in the Middle East, and the looming threat of disruptions related to the hurricane season. All of these have one thing in common -- supply / demand concerns. The market will react quickly and emotionally to any one of these factors, and even more strongly should more than one start to play out at the same time.

Yesterday, I mentioned the increasing tension between Iran and the West, with Iran now claiming the nuclear issue to be a "closed case" and that it will defy any UN sanctions imposed on it. This is happening at the same time that the United States is toughening its stance against the Middle Eastern country and calling for other nations around the world to do the same in its attempt to put an end to the ruling party's "reign of terror."