The US needs to devalue the dollar to kick start a recovery in the economy (in a beneficial way, i.e. making stuff and exporting it or displacing imports) and put a bottom under the real estate and stock markets (make the dollar worth less and foreigners will come in and start buying everything up to get rid of their depreciating paper dollars).

At the same time, the massive fiscal deficits have to be funded. If the Fed starts to monetize Government bonds (which they will have to), they will be able to maintain low interests rates while causing a flight out of paper dollars (due to fears of inflation) forcing the exchange rate down against other currencies and gold and oil.

The alternative is a deflationary depression in the world biggest debtor nation. How likely is that to be allowed to take place? I'm looking for the dollar to roll over and start to go down with gold and oil going the other way.

Oil has to rise as it isn't worth producing it at these prices. That depletion curve is relentless and will far outstrip any demand destruction that will take place. Higher prices will be needed to ration supplies and stimulate investment in new sources of energy.

I still can't decide if they let Lehman go in full knowledge of the consequences and that was all part of the plan to collapse the assets markets and sucker investors into Treasuries to fund the bail out, or, they just don't know what they're doing.