Oh man, what a roller coaster ride the financial markets have been. Last week I speculated that the next move by the Fed would be to raise interest rates to fight inflation, since oil is now trading at well over $100 a barrel, commodities have had a huge run, and the Euro hit $1.58. Instead the Fed cut the discount rate by 1% over the last couple of days to bail out the financial sector.
I even heard one claim of fighting deflation, which is worse than inflation. The guy said we are experiencing deflation because of the fall of housing prices. As a non-homeowner, I love to see home prices falling, but I can see where he is coming from.
So the Fed has made a bold move to bolster home prices and fight deflation. I wish I would have kept my money in Euros, because we can expect a further decline of the greenback. This is great news for net exporting companies, because the US dollar is going to be even weaker. Man, I wish I had some cash laying around, what a great time to buying the right stocks.
On a side note, my portfolio was up over $1,700 today. That’s pretty cool; it would have taken me 425 hours at my first summer job to make that much money. Considering that I didn’t even take my morning shower until about 7:30 PM, I can’t complain.