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The dollar rose against a big basket of currencies Tuesday, sending gold and silver down. In "real" trading, however, gold held its own quite nicely, when divorced from the dollar surge. 

A string of recent, solid U.S. economic data gave underpinning to the view that the Federal Reserve will scale back economic stimulus measures sooner than expected. The greenback rally accelerated when it rose above the key 100-yen level for the first time since early June, spurred upward by more expectations of a reduction in the Fed's quantitative easing program. 

Certain statistics this week provided fodder for the Fed reduction argument as reports showed a rebound in American manufacturing and a rise in factory orders. Expectations of a reduction of the asset purchase program has been buoying bond yields and enhancing the appeal of dollar assets, especially as other major central banks continue to lean toward further monetary easing. 

"Our sense is that the Fed comments and recent economic data are still consistent with the tapering message and that's positive for the dollar," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. 

However, William Dudley, head of the  New York Fed, said on Tuesday "The dollar has also been supported by the contrast in monetary policy between the Fed and the other major central banks. The U.S. is moving to a less dovish direction, while the other central banks are staying dovish or becoming even more dovish," Serebriakov added.

Investors are keeping a close eye on Friday, when the the Labor Department will release its June jobs report. Markets hope those numbers will act as a bell-weather as to when the Fed may begin to dismantle stimulus programs. 

But, but, but... according to AP, "a measure of manufacturing employment fell in June to 48.7, its lowest level since September 2009. That suggests that Friday's June employment report will show that factories cut jobs for the fourth straight month." (We don't need no stinkin' workers.)

Rational irrationality seems to be prevailing. But some voices are speaking to the heart of the matter.

The barely left leaning Policymic.com commentary site had a long piece about employment today. It said in part, "Employment is still the key metric for the U.S., both for short-term market movements and for long-term sustainable economic growth. From a long-term perspective spare capacity in the labor market is a drag on growth. While unemployment rates have been improving since the crash, much of that improvement has been in short-term unemployment and there is still some way to go to get from 7.6% to the long-term average of 5.82%. Making those people productive and more able to consume will not only boost economic growth but reduce the numerator of the public debt/deficit problem by bringing down benefits payments."

Every once in a while, the buck actually does stop and we get to an important truth.