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Are the US and global economies developing a speculative bubble? Just a year ago, investors and policy makers were still reeling from the fallout of the worst financial crisis in modern history. Today, though growth projections are reserved and yield expectations are far below the levels seen through the boom years, the Dow is 60 percent above its 2009 lows. This is a side effect of the world’s governments laying down a safety net for speculators in the form of policy and encouraging risk taking through unprecedented injections of stimulus. Interest rates near recent-record lows have opened the doors to financing and leverage; and market participants are happy to recover some of the wealth lost through the preceding crisis. However, a factor that has been ignored for too long through the bullish rally is that this market cultivation is temporary. Eventually, the government has to withdrawal its support and the market will have to stand on its own weight. Considering the sharp rally in the dollar and drop in risk-sensitive markets today, this eventuality can no longer be ignored. And, while this particular spike in volatility doesn’t necessarily mark the turning point for speculation; it nonetheless speaks to the doubts that lie just beneath the surface. Should a move to fairly value capital markets develop, the dollar will be a primary benefactor as a primary source of funding behind the carry trade build up. Furthermore, when the US and Japanese 3-month Libor rate finally flip in the dollar’s favor, the greenback won’t have to depend on risk alone.