Feds failing the economy test

The stock market is near its 2 year lows but I don’t think it’s near the bottom. I think Monday may provide us with a bounce once the Fed opens up and announces what their true intentions are and give confidence to the market. Unlike previous times when they made emergency interest rate cuts, that will not be available to them this time.

Those 7 interest rate cuts in 7 months were a mistake and we are now paying for it with higher food and energy costs including higher prices at the gas pumps. Those rate cuts didn’t even accomplish their goal of stabilizing the housing market. We will continue to go down in housing prices until the excesses are squeezed out of the market and it balances out proportionately with the incomes of what the average American family earns.

Instead of going through the regular business cycle, the feds have actually caused the recession to become more severe than ever. The stock market had its worst June ever since the Great Depression. Those are not words that will inspire confidence in our current state of economy. Having a run on a major bank and having the FDIC take over it is also worrisome. If one of the largest banks in the US is having problems and the feds have to take over it, then people start to wonder if it is really safe to keep your money in other banks. The federal reserve should raise interest rates again and strengthen the dollar. A stronger dollar will help commodity prices and weaken other currencies. And yes, crude prices would actually come down. The price of crude and other commodities went up in conjunction with the interest rate cuts. That fact is indisputable. Demand from China and India did not cause the price of crude oil to double in the last 9 months as some silly morons try to suggest and transfer the blame to other countries. Our weakened dollar is the cause of our own misery and yes the government needs to do what is right to put our economy back.

That is why I worry about our next presidential candidates pandering to the voters that they will cut taxes. THESE WORDS AND ACTIONS WILL NOT STOP THE PRICE OF GAS GOING UP NOR SLOW DOWN THE SKYROCKETING INVENTORY OF FORECLOSURES. These senators do not have to wait to become president to take action to help the US economy. THEY BOTH NEED TO TAKE ACTION NOW UNDER THE OFFICES THEY HAVE ALREADY BEEN ELECTED TO WHILE THEY RUN THEIR CAMPAIGNS.

Really is it too hard to stop talking and start showing action. Show me the money!