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The rate of growth for retail sales is declining more and more. Kind of makes you wonder why Bernanke is so concerned about inflation. With the consumer buying at such a lower growth rate, prices will eventually decline. Here's the chart:

The last time we saw a decline like this, we were in the recession of 2001. We're a long way away from a recession. But, the ingredients are in the pot, and it's starting to simmer. How much higher can the Federal Reserve think they can go without completely breaking the back of the consumer? Sure, inflation is something that is of concern. But, a lack of balanced policy can't be prudent.

My outlook: It won't be long before we are seeing some negative numbers in the retail sales, perhaps within 5 months. It also won't be long before we start seeing the Federal Reserve start taking back a few of their interest rate increases. The eventual decline in the consumer will lead to a sharp fall in the dollar. That's what I am playing for. It should take a few more months to start playing out.

Source: Retail Sales Continue Their Decline (ETF: RTH)