The way the price of oil has plummeted this week on the dollar's rise amid the flight-to-safety lends more support to the theory that if the U.S. budget was balanced, crude would fall, oh, about $30 or $35.

Oil is priced in dollars. Hence, when the dollar falls, oil's price usually rises, and vice-versa. Starting in 2001, the dollar began to weaken as the U.S. budget went from a surplus under President Bill Clinton to a deficit under President George W. Bush, with the euro strengthening from about 82 cents versus the dollar to the current $1.3605. During that time oil's price has more than tripled from the $25 per barrel crude price in 2001.

On Thursday, markets across Europe, Asia and the U.S. sold off sharply. The reason is concern over Greece, Spain and Portugal being unable to manage their sovereign debts. The problem did not vanish overnight. The spread between the Greek and German 10-year government debt expanded since Thursday. Investors and traders sold the euro and bought dollars. Again on Friday, even with the Swiss Central Bank selling its own currency, the euro is still under pressure.

The dollar is strong again Friday, with the U.S. dollar index trading at 80.39, up .315 (8:30 EDT). In contrast, the euro has fallen 1.1% so far this week. This is the fourth consecutive week of losses.

China is sending signals that efforts to assimilate the giant Asian economy into the international financial system are not likely to include measures that Beijing has heretofore resisted.

One tack China is opposed to: changes in the yuan's value that it does not see as acceptable.

Ma Zhaoxua, a China Foreign Ministry spokesman, said at a regular news conference, "wrongful accusations and pressure will not help solve this issue," The New York Times reported Thursday.

Goldman Sachs has elevated McDonald's (MCD) to conviction buy from buy and upped its 12-month price target to $75 from $73.

According to the brokerage, McDonald's is weathering the current economic crisis thanks to a combination of positive same-store sales and accelerating margin gains. Goldman added that consensus estimates underappreciate this fact, which should bring about some upward earnings revisions during 2010.

Thinking about diversifying a portion of your portfolio out of the dollar, and in to, perhaps, other hard currencies, such as the euro?

About six months ago, selling dollars and to buy euros appeared to be such a slam-dunk, no-risk investment move. After all, the United States was and will continue to record $1 trillion-plus deficits that are destined to result in further weakening in the dollar in 2010. The dollar will fall, the dollar-bears argue: it's a no-brainer.

New York Times (NYT) columnist Paul Krugman characterizes China's essentially fixed-rate currency policy as "predatory."

I've called it "monetary mercantilism." Either way, the policy will remain a net negative for both global and U.S. GDP growth until China is convinced to move, gradually, to a currency rate that's determined by economic fundamentals and the free market.

And, as they say in the foreign exchange, 'easier said than done.' The yen has risen to a level versus the dollar that's a concern to Japan's auto makers. Although the yen is roughly unchanged versus the dollar since January 2009, it's strengthened about 15% versus the dollar since the onset of the global financial crisis' acute stage in August/September 2008.

The significance? Japan's automakers must raise prices on cars/vehicles exported to the U.S. to protect profit margins of vehicles priced in dollars: if they don't those margins will shrink.

U.S. industrial production rose 0.8% in November. The index showed no change in October. We can infer from this that manufacturers are working off inventory and are able to produce more to meet increased demand. Economists surveyed by Bloomberg News has expected a gain of 0.5%.

Here are specific sector changes:

• New York's Empire State Index fell to five month low of 2.6 from 23.5 in November. Readings above zero signal expansion.

Gold has fallen from a record close of $1,217.40 to a four-week low close of $1,119.40 on Friday -- roughly 100 points on one futures contract. As each point equals $100, that is roughly $10,000. Try doing the math if you hold 100 contracts.

Why the sell off? Carlos Sanchez of CPM Group told The Wall Street Journal that "Expectations are rising that the U.S. economy may not be faring as badly as many would have expected."

Carl Johansson of goldessential.com put it this way: "Gold's sell off is blamed on the dollar, rather than investors being willing or reluctant to take risks," The Wall Street Journal reported.

Paraphrasing the great Twain, if you don't like the price of oil, wait awhile.

Oil, which traded in a seemingly interminable $75-80 range for seven weeks, closed below $70 Friday -- down 84 cents to finish the week at $69.70.

And, as one might sense, the oil bears are scavenging in the woods, trying to change oil's narrative to one based on fundamentals: from a supply/demand standpoint, oil should be nowhere near $70. Inventories of several key indicators are at yearly highs or better. U.S. oil demand is down on a year-over-year basis, due to the pronounced recession, and may not recover to pre-recession levels for years. Meanwhile, Asian/emerging market demand, while rising, is so far not extraordinary.

Oil prices, which were up earlier in the session, have moved lower in afternoon trading after the dollar rebounded from earlier losses.

Earlier in the session, the U.S. dollar had dropped as much as 0.3% against competing currencies, but reversed course and made back most of its losses. The greenback is now down just 0.1% on the day against competing currencies.

The U.S. dollar continued to hold steady against most other major global currencies on Monday despite very dovish comments from the Federal Reserve Chairman Ben bernanke. If you aren't a Fed-watcher, "dovish" means that rates are likely to stay flat or decline in the near term.

Usually, low rates are bad for a currency and with the dollar's free-fall this year it is a surprise not to see that trend continue. At this point, it may be that traders have priced in as much of a decline as they think is possible in the near term.

The US dollar index hit a one-month high against a basket of currencies. Investors are betting that improved labor markets will force the Fed to raise rates.

The US dollar index climbed to 76.183, the highest since November 4. The euro traded at $1.4788, down from Friday's $1.4846. The dollar was at 90.07 yen, from 90.51 yen. The UK pound was at $1.6347, from $1.6449. The dollar was at 1.0219 Swiss Francs, from 1.01.70.

Good news on the economy is viewed as putting a damper on ultra low interest rates. The market will be looking to the Fed for clarity on whether November's job report will prompt a hike in rates.

Today's jobs number could be game changer. US jobs fell by only 11,000. Analysts had expected 130,000.

Traders reacted instantly. The S & P initially rose 1.3% to 1,117.20,but has turned lower.

The dollar rose against the euro, up .8%. The euro traded at $1.49, down against the dollar. Against the yen, the dollar rose 1.7% to Y89.80. On a trade weighted basis the dollar traded at 75.29.

With hope of a of a stronger economy, oil initially rose 1.3% to $77.48 per barrel, but followed commodities lower. Gold, which had trading higher on a weak dollar, fell 1.5% to $1,188.20 per ounce. At noon EDT, gold was down $49.00 per ounce.

The European Central Bank Thursday kept its key, short-term interest rate the same at 1%, a move investors in Europe and around the world no-doubt welcomed, for several reasons.

First, Europe's economy is nowhere near sustainable growth status: euro-zone GDP will likely to show a 3.7-4.0% contraction in 2009, and post only a modest increase in 2010 -- perhaps as low as 0.5-1.0% GDP growth. ECB President Jean-Claude Trichet underscored as much. "We know we have a bumpy road ahead of us," Trichet said, Reuters reported Thursday.