January 2008 is going down in history as the worst month for the start of year in the Stock Market. The month had 15 days of triple digit swings. This is a very volatile time filled with a lot of anxiety and uncertainty.
The Federal Reserve has become the topic of conversation for people who just up until a short time ago didn’t now the Federal Reserve existed. And all of the talk has been about them cutting interest rates to help stimulate the economy, which everyone now recognizes as being in trouble.
In an 8-day period the Federal Reserve cut interest rates twice, once by .75 and then by .50 basis points for a total of 1.25%. This has not had the effect that many had hoped for and bad news continues to come out daily.
Why has the rate cuts not been as effective as the Federal Reserve and the Government and Wall Street expected? It is because most investors aren’t dumb. They see what is actually happening in their own neighborhoods. They see the handwriting on the wall and in the headlines.
If one truly opens their eyes they will see that the Fed and Ben Bernanke is caught between a rock and a hard place.
You will see that the economy is going south and not responding to lower interest rates. All of the statistics coming out of Washington has been shocking to some. Home construction plunged 24% for the fourth quarter, the worst since 1981. The economic growth came to almost a standstill at the pace of just 0.6% during the same period.
On the other hand you will see that every time the Fed cuts rates Inflation only gets worse. Every time the Fed cuts it weakens the U.S. Dollar and the Dollar is taking a pounding in the Forex Market.
Wholesale prices are rising fast and import prices have surged higher signaling much higher inflation.
Hopefully, you can see that the Federal Reserve is stuck between a slowing economy and rising inflation. This is a tough position to be in with no way out.
This is serious.
For my analysis of the horrible position of the American economy and U.S. dollar, read my new report “Fall Of The Dollar: Are Black People Prepared For The Coming Economic Collapse?” http://www.fallofthedollar.com
