Over the last seven years, the U.S. dollar has attempted to muster several rallies only to succumb to newer lows as measured by the U.S. Dollar Index. The last calendar year gain for the buck was in 2005 when it rose 12.7% versus the euro.

The big picture, contrary to market consensus, is not whether the Fed raises rates later this year; I think the odds of a rate hike this year are near zero. Until the housing market and credit indices finally form a secular bottom, the dollar will remain hostage to rising inflation, weak financial markets and low interest rate yields relative to other global currencies.

The dollar is now testing important support levels as measured by the U.S. Dollar Index as it trades just above its key 50-day moving average. The odds, however, favor a new low for the American currency before the end of the summer. Yes, despite Big Ben's strong dollar mantra earlier this month, the dollar is about to bust through important support levels.

At some point, of course, the U.S. dollar will form a bottom. That inflection point will coincide with a bottoming in the housing market and eventually, rising interest rates as the Fed starts draining liquidity from the financial system to cool inflation. If it could, the Fed would probably hike lending rates now as commodity prices continue to skyrocket; but no central bank worth its salt will raise interest rates amid a severe deflation in housing and consumer credit and a deteriorating labor market. The Fed has no choice but to keep rates right where they are for the moment and let inflation continue to erode the purchasing power of Americans and all dollar-based investors.

America is on Sale. No doubt about it. U.S. assets are extremely attractive to European, Latin and most Asian investors. The dollar has plunged since 2002 making stocks, bonds, real estate, art and just about any other dollar-denominated asset a big bargain. It’s not time to buy dollars just yet. But 12 months from now, assuming housing bottoms, the dollar will rank as the one of the greatest investments of the decade – at least until the next bear market.