Not ridiculous at all. But since we are discussing it now, when oil slumps as it inevitably will (bloated supply, no pent-up demand), the smart money will jump into the dollar. Then we get to see what that pressure does to your concern about inflation.
With all due respect my man, that reasoning completely ignores typical market functions. First of all, a flight from oil does not automatically typify a flock to the dollar. There's still the issue of gold shattering its record high and not looking like there's anything to stop the momentum. It took a hit on Friday, but with WHAT to SUSTAIN such?
You simply can NOT just ignore the monetary base. You have to understand that the monetary base is where the economy's money eventually pulls from, and as banks start to lend again, that money will be added to circulation.
This is the reason why many feel that the market has gone so high. The smart money, as you say, is going anywhere BUT the dollar because of the virtually inevitable potential for inflation down the road. Asset inflation almost always precedes price inflation due to money supply expansion. This signals investors getting an early jump on increasing the value of their wealth by getting out of cash.
While you may see oil drop slightly in the near term, you will and ARE still seeing the commodity market ultimately going higher. Silver is almost at $20, and copper is approaching $4.
And look at commodity futures overall. Look at the far month contracts on Wheat, for instance. Or cotton. Or soybeans.
Most took a hit on Friday, but never underestimate the power of Friday profit-taking. It's the far month contracts that are telling a bigger story.
When I see the Fed finally grow a set of balls and extinguish some bank reserves and raise rates, I might start to change my tone. Otherwise, there's every reason in the world right now to be in this market due to the monetary policy moves of the Fed in the last 12 months.
