Ground Report

     Each day the financial crises seems to get worse.  The credit markets are still clogged, banks are afraid to lend due to rising loses and a worsening economy.  The Big 3 automotive companies are on the verge of bankruptcy , and job loses are mounting.  Despite all this bad news I actually think the stock markets are near a bottom.  I think the recession that we are in will last a couple of years however I believe we are in the 7th inning of this financial crisis.  Interest rates have come down so much that it is only a matter of time before this trickles down  to kick start the economy again.  The Fed funds rate in the United States is at 1 percent and may go below that at the next Fed meeting.  Central Bankers around the world are also lowering interest rates in order to spur the economy.  This will ultimatley lead to people refinancing their debt and mortgages at a lower rate thus giving them  more money to spend at the end of the day.  Of course most people when the have more money don’t save it they spend it.  Although this sounds very optomistic for the future I am actually very concerned that the long term impact of high debt and historically low interest rates may have on our economy.  These low rates going forward are going to devalue our currency and ultimately create higher than normal inflation.  My advice save your money and purchase tangible assets such as a home, gold anything that has some value.  I take the view that the American dollar is not worth the paper it is printed on.  I think that the financial crisis has bottomed in the short term however the longer view for the next 5 – 10 years I have great concerns that we may be repeating this all over again.  Lets keep our fingers crossed and hope for the best.  Save your money and spend wisely and you will be ok.