The State Of The Union And Making Money Free
Read more articles on Finance and Politics.January 28, 2008
Posted by neillevine
January 28, 2008
Posted by neillevine
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Tonight, this country will be able to listen to the current President of the United States, one George W. Bush, who will be making his last State of the Union address, an event that has for more than two hundred years been treated as a major political speech, wherein the leader of this country lays out his political agenda for the coming year and other elected federal officials responds in kind and then do their thing. Despite differences in outlook, status, priorities and philosophy, most Members of Congress and other American leaders will politely listen and then take President Bush’s proposals to the next level of political discourse, wherever that may lead them.
Mr. Bush is expected to urge the Congress to pass an economic stimulus package that centers around a three hundred dollar per person tax rebate package that is supposed to encourage spending that will pump up the volume of economic activity enough to ameliorate or compensate for the problems in the housing and banking sectors caused by the sub-prime mess and possibly encourage the capitalist dogs running the stock market to rally.
You ask, especially if you want to know what is going on, “What is this sub-prime mess, what good is it and how can I avoid such a pickle?”
Well, a while ago, the Federal Reserve, a government agency that could be called, if you wanted to call it for want of pithier terminology, the American Central Bank, was looking to raise interest rates, not to make money and not out of the goodness of its warm, fuzzy little heart, but because it acts as if economics is the dismal science it practices. This raised the cost of borrowing for many people with loans and made it harder for borrowers of the sort that needed easy money to pay their bills.
This, of course, created problems. The cost of cheap money had become too expensive for many people and they not only complained, they lost money. Then they lost their shirts, their cars, their homes and even declared Bankruptcy.
This was not good. The poor consequences, naturally, could have been expected but higher interest rates also created disenchanted voters. With the new election season upon us, in an effort to spread happiness and contentment throughout the land, the Federal Reserve has reversed course and begun to cut what it charges its client banks so they could make it easier to pay off burdensome mortgages and high interest rate loans.
Of course, there were doubts in the financial community about how wise and reliable all of this was in light of a history of inexplicable recessions and high energy prices. So the bulls of Wall Street did what they always do when they worry. They became bears.
In response, the President is urging stimulus. The Federal Reserve will meet among rumors that it, too, wants to recover from this mess. And then, at the end of the week, OPEC, in its infinite wisdom, will decide to act decisively.
This could be the end of the beginning or the beginning of the end, but one think you can be sure of if you buy low and sell high you can make money, in most markets.
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