Living down in Florida grants you many exclusive pleasures that very few other places can. Among them is Major League Baseball’s Spring Training -- that magical time once a year when fans get an up-close sneak peek into the season ahead. The departure of winter means an opportunity for veteran ballplayers to get back in the swing of things, rookies to show what they’re made of and analysts to toss out the first bold predictions of the new-fangled season.

For most fans, our hopes build up through the off-season only to be trampled on from day one. Indeed, the worst thing you can hear as forecasters dissect your favorite team’s potential is “It looks like a rebuilding year for these guys.” Once those depressing words are uttered it’s tough to hold back the tears and not force yourself into hibernation until next Spring.

Of course, there are always a few surprises, and that’s what keeps us tuned in all season long. And as I see it, the potential for surprises is the only thing keeping investors tuned in to the U.S. dollar.

A Rebuilding Year for the United States

As was evident by a housing and credit collapse, the U.S. economy finished off last year on a major slide. In fact, going into 2007 analysts had been expecting a rough road for the world’s largest economy. And now, after an awfully pathetic first quarter 2008, I think we can safely expect this will be a rebuilding year.

After all, you can’t expect much success when your offense (consumers) is slumping, your defense (Federal Reserve) is full of holes and your pitching staff (workers) is mostly marred. It’s at this point when you face the facts and make a commitment to restoring the organization no matter how long it takes.

Hitting each of the three pillars individually is a good place to begin. Let’s start with...

The Offense – American Consumers

You’ve heard it over and over again – consumption makes up nearly three-quarters of U.S GDP. When this core driver was firing on all cylinders the U.S. stood head and shoulders above all other major economies. But that dynamic is shifting. The biggest contributor to the U.S. economy is going down looking.

Granted the U.S. consumer has dug himself quite a hole. Debt as a percentage of GDP sits at around 130% -- talk about being behind in the count. Not to mention tightening credit and surging inflation are barreling down on us like a Nolan Ryan fastball.

Day after day we get new word of financial institutions shaving off earnings to cover their exposure to bad debt, mortgage companies forfeiting over hundreds of millions of dollars on subprime-related losses. The result: fewer and fewer institutions are willing to lend money while they try to shore up their balance sheets. That doesn’t bode well for consumers.

On top of that, the latest report on U.S. consumer prices showed a rise of 4.3% -- not exactly a comforting rate of growth. We all have to eat, and most all of us have to drive, so we can’t avoid rising food and fuel prices. And even beyond that consumers are feeling the pinch in the rising cost to put clothes on their backs and a roof over their heads.

And did I mention the dollar is in all-time low territory?

Strike One!

The Pitching Staff -- American Workers

Behind any successful economy is a healthy labor market. That’s because steady job growth bolsters consumers’ spending power and positively impacts an economy’s bottom line.

Idle hands are the devil’s workshop, or so it’s said. Without workhorses driving production, earning money and pumping it back into goods and services, the economy risks spiraling out of control. It’s a vicious cycle and the latest numbers don’t brighten up the situation any.

Average weekly jobless claims figures for 2008 currently stand 20,000 units above the average for all of last year. Last month we learned that the U.S. economy lost 17,000 jobs in January. And just yesterday we learned that a disappointing January was followed up by an equally pathetic let-down in February when the economy lost 63,000 jobs.

Not good. And it only gets worse when you look at workers wages. Factoring in rising consumer prices, the real average weekly earnings fell by 0.5% in January with little change in February.

Strike Two!

The Defense -- Federal Reserve

Sure, when your offense is powerless and your pitching is demoralized you can’t expect your defense to seal up a victory all by itself. Nevertheless, this is who you trust can stop the bleeding. That’s what the Federal Reserve is there to do – respond to incoming growth and price data and do their best to keep it all intact.

Monetary policy must be strong up the gut, but with this Federal Reserve it is not. Their interest rate and money supply strategies are not flexible when challenges come barreling down the line. Instead the Fed appears flat-footed, its feet planted in one direction.

As this defense, led by centerfielder Ben Bernanke, struggles to keep the U.S. in the game you can’t help but notice the comedy of errors.

• A substantial reduction of borrowing rates for banks that have no desire to lend it back out to consumers
• An aim to pull the economy out of the toilet, ignoring inflation concerns along the way
• Blatant disregard for the U.S. dollar

For goodness sake, grit your teeth, patch up the week spots, and do what’s best for the economy in the long-run. Everyone knows these “quick-fix” shenanigans the Fed spouts off about do us no good. It’s a rebuilding year for crying out loud. Don’t drag us slowly from the grips of recession and then straight into the mouth of inflation.

Strike Three!

Diagram 1 Click to zoom.

Give consumers the opportunity to save, let job market work out the kinks and leave them with a stable inflationary background when they do emerge ready to conquer the global economy once again.

Now excuse me, I’m going to take a break from hugging my FX trading screens to go catch the 1:10 start time for the Mets over at Tradition Field in Port St. Lucie.

Play ball!