I told you to start buying stuff you need. Everything is going to get more and more expensive as the dollar drops. From Financial Times:

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The dollar dropped to its lowest level in more than two-and-a-half years on Thursday as buoyant risk appetite prompted investors to sell the currency to fund carry trades.

Analysts said robust corporate earnings figures had boosted hopes over global growth, while the prospect that US interest rates would remain at ultra-low levels was fuelling demand for carry trades, in which low-yielding currencies such as the dollar are sold to finance the purchase of riskier, higher-yielding assets elsewhere.

Market rumour that the People’s Bank of China was poised to implement of substantial, one-off revaluation of the renminbi also weighed on the US currency.

The dollar index, which tracks its progress against a basket of six leading currencies, fell 0.8 per cent to 73.785, its weakest level since August 2008. Traders said the stage could now be set for the index to target the record low of 70.698 it hit in March 2008.

The dollar also dropped 0.9 per cent to a 16-month low of $1.4641 against the euro, fell 1 per cent to a 16-month trough of $1.6560 against the pound, lost 0.8 per cent to a record low of SFr0.8817 against the Swiss franc and plunged 0.7 per cent lower to Y81.93 against the yen.

The Australian dollar, which with its relatively high yield and commodity-linked status has been a favourite target for carry trade investors, surged to a fresh 29-year high against the dollar, rising 0.6 per cent to $1.0758.

Lee Hardman at Bank of Tokyo-Mitsubishi UFJ said dollar weakness continued to be mainly driven by widening expectations of monetary policy divergence between the Federal Reserve and other major central banks.

He said the downgrade of the outlook of US sovereign debt by rating agency Standard & Poor’s on Monday had reinforced this dynamic by increasing expectations that the Fed would have to keep interest rates at ultra-low levels for longer to offset the negative impact from the expected fiscal tightening.

Mr Hardman added, however, that while near-term concerns over monetary policy divergence and heightened US fiscal concerns were genuine, he believed there was a strong case that current dollar weakness was overextending.

“With market liquidity thinning heading into the Easter holidays, it provides the ideal conditions for a dollar undershoot relative to fundamentals,” he said.

This weakness is coupled with some of the worst crop yields in recent history – especially things like cotton. Time to go out and buy the things you will need next year,because you won’t be able to soon.