Declining Dollar Could Affect Housing Prices

MSN reports:

Last week the world called the tune, and the U.S. dollar danced.

The dollar's tumble and Federal Reserve Chairman Ben Bernanke's attempts to placate overseas investors are the clearest signs to date that the foreign investors who finance the huge U.S. trade deficit have gained significant control over the U.S. economy.

A few more weeks like that, and it will be clear to everyone outside of Washington that the Fed has lost control over U.S. interest rates.

Here's what happened:

On Nov. 28, as the dollar edged toward freefall against the euro, hitting a 20-month low against that currency and plunging below key support prices in the currency markets, Bernanke got up on the ol' soapbox to say that inflation was still "uncomfortably high," growth in the economy was solid and the Fed's next decision would be whether to raise interest rates again.

Rates could be going up if the dollar keeps going down.