Commodities predict future of Dollar?

I am still trying to come to grips with $70 oil and higher stock markets. I am thinking that what the commodities are doing right are reflecting the true value of the dollar but for some reason the currency markets are moving way behind the curve. In other words, commodity traders are pricing commodities to demand more dollars. They are already factoring in a large say 25-40% drop in the dollar.

So, strangely enough as the dollar falls, commodity prices will not continue to rise. The currency will be in effect catching up to the reality set in the market for commodities priced in dollars. The exception so far has been food commodities. I suspect they will move with the dollar since so much of the food produced and exported is from the US also. This is when the Fed will freak and boost long US interest rates higher till the long rate approaches 8-10%.

Just a thought.

This note from a professional in the brokerage industry in Scotland..

I am a bit perplexed myself about the level of the markets and the oil price. Thinking back a year or so, everyone was taking fright at oil being $50 and the impact it would have on company profits. A good example is British Airways, trading at a level not really seen since late 2001 and think what oil has done in that time.
I don’t think interest rates at 8-10% would be good news for equities but for now the greed factor seems to be winning the argument and pushing indices higher. A perverse world!
Regards,