As the dollar falls what will happen to interest rates

As the US economy continues to slow we are seeing more weakening of the US dollar.
The dollar has fallen over 200 pips in the last day to over 1.50. This is clearly stating that people are selling the dollar at a lot faster pace than they are buying. Could it be the the foreign countries that have US dollars are now deciding to sell. The Iranian's are threatening to start selling oil in non US dollars, Consumer Confidence declined in February, with the index at 75.0, down from 87.3 in January and much was lower than market forecasts dropeped to 81.0. This is the lowest level since 2003.

If the US consumer is no longer spending money what will be driving our economy. The US people have been spending more than they earn for many years, the last year the saving rate in the US was a negative 1.5% meaning they are spending more than they earn. This with the way the US Government is in debt continues to weigh on the dollar.

Fed Chairman Bernanke will be speaking the next couple of days testifying on the Hill on the State of the Economy, which doesn't look good. It looks like they will continue to cut rates (over-night lending rates), but we are yet to see how that will effect the long term rates. Although the rates on the 30 years mortgage are dropping, the qualifications and the home prices make it more difficult to get these loans.

New home sales info will be out today and I am not sure were they will come in but I am thinking that they won't be good. So it still doesn't look as if we have hit the bottom. The problem is much deeper than what we are seeing. The selling of the CDO's to foreign banks is just adding to the problem in that it is effecting world wide banking.

The issues of the US economy doesn't look good. It just seems that there is more negative news to come. The way that the US people can help is to not follow what our government does and that is creating debt. Don't spend that which you do not have! It's time for American's to spend their money wisely, invest their money wisely and contiue to pay down their debt. It has to be a grass roots effort to change the financial situation in this country for good. If we don't start doing the right thing we can't expect our government to do the right thing.

Just in.... dispite the FED involvement in cutting rates interest rates just ticked higher.