Usually the conversations begin with “did you see the DOW tank today” and just about every conversation includes thoughts and opinions about where the bottom will be and what value stock markets could return to when the economy recovers.

I might be 100% wrong, but I doubt stock markets will ever, within the next few decades anyway, reach the values we enjoyed a short time ago. In markets throughout the world, American debt helped fuel growth and created a false perception of wealth.

We purchased everything using credit cards or home equity loans. Early morning coffees at Starbucks, laptop computers, cars, clothes, dinners and anything else that was marketed to us was purchased with plastic. Our nation grew on debt.

The products and services that banks bought, and American’s repaid in monthly payments increased the value of everything; these value’s are as fake as Santa Claus and the profits that companies enjoyed were too. Most of these companies will never again sell as much as they did, they will never be as profitable.

I call the true value of the DOW around 10,000 or 11,000, what say you?

Seriously does my idea make any sense? I didn’t think so which is why I constantly wonder why the Fed lowers rates and then tells the public that they’ll most likely do it again soon. I’m not making this up, I swear. The Fed lowers the rates; then the Fed and the media tells the world that the interest rates are going to go down in the short future and wonders why nobody buys a new home, or refinances their current home loan today. It’s ludicrous and weird. It’s similar to telling a person that they can buy a car today for $500 and for no reason, they can buy the same car next week for $350. I’d wait for the $350 price. Does this method give investors anything to feel comfortable about? Sure it does – they’re comfortable with not investing in markets affected by these absurd acts. They are comfortable not investing in America.

I just got a new idea! Why not lower the rates and tell people nothing? Why not just say “We’re lowering rates this week and might meet again on it in the future”? HMMMM – I might just go out and buy instead of waiting to see what you may do sometime in the future.

I think the definition of insanity is doing the same thing over and over again and expecting different results. I think the Fed is insane but that’s just me. Keep cutting rates Ben and keep telling people it will happen again, and then, and only then, it will never work. The effect of several Fed rate cuts will leave us all waiting for the next cut. If it does ever get out that there will be no more cuts, will it be too late? Cheers to prolonging our dilemma.

This is what we have to work with – this is why I ask How f’d are we?

JG