We are wondering out loud if a Tea Party/Republican rout with both houses of Congress changing hands could blindside markets with a huge short covering rally in the dollar?  QE2 needs to be large enough to offset the positive dollar story of the election results, in our opinion.  Furthermore, the policies of Bernanke & Co. are going to experience a squeeze of their own in the new Congress.  Just listen to Newt,

Gingrich is openly critical of the Fed’s anticipated move.

“Chairman Bernanke I think is fundamentally misguided in his approach. The number one job at the Federal Reserve ought to be stable money. And if it’s not producing stable money, it’s going to produce inflation” he said.

By trying to avoid the necessary shakeout, the Fed is making the recession longer and deeper and is stopping new job creation, he said.

“This entire theory that we don’t have enough cash is based on a fundamental misunderstanding of velocity – the volume of money you have is a combination of how much money there is and how fast it turns over. In a period of really deep economic recession people don’t turn it over very fast,” he said.

Just asking.