Or, maybe the storm is here. Yesterday we asked whether the U.S. was turning into Greece. Today, the question seems to be “Is the world turning into Greece?” as stock markets around the world drop by 3% to 6%.
The Dow is down more than 600 points, while commodities are also down except for gold, contrary to the fears of those who expected inflation or even hyper-inflation.
As we noted yesterday, most of the world’s financial wizards seem to have lost their wands, though their dunce caps are still in place. They and the financial media are still pointing fingers at S&P, attacking the rating agency’s record and smearing their reputation. But that won’t do any good. A is A, as Ayn Rand was wont to say on many, many occasions.
Here’s Mish’s list of stimulus programs gone wrong. We can find no fault with it.
Is there any kind of stimulus the US did not try in the last 10 years?
We had 1% interest rates from Greenspan fueling housing. We had wars from Bush and Obama fueling defense industry employment. We had two rounds of Quantitative easing from the Fed. We had cash-for-clunkers. We had two housing tax credit packages. We had an $800 billion stimulus package from Congress for “shovel-ready” projects. We had stimulus kickbacks to states. We had HAMP (Home Affordable Mortgage Program). We had bank bailouts out the wazoo to stimulate lending. We had Small Business lending programs. We had central bank liquidity swaps. We had Maiden Lane, Maiden Lane II, and Maiden Lane III We had Single Tranche Repurchase agreements We had the Citi Asset Guarantee We had TALF, TARP, TAF, CPFF, TSLF, MMIFF, TLGP, AMLF, PPIP, and PDCF We had so many programs the Fed must have run out of letters because they were not given an acronym.
What is our investment strategy in this time of trouble? Simply: hang on. Why? Because in our new office in a lovely rural part of this county, dozens of huge ag machines and log trucks trundle up and down the highway daily. Many commuters in cars and pickups speed by, interspersed with horse trailers and RVs.
Huge trucks laden with hay go to market. Friends have offered us some of their surplus summer squash (euphemism for zucchini) and volunteer blackberries. Our blueberries yielded what looks like a life-time supply and we’re giving lots away. Our potatoes, corn, onions and even eggplant look good; greens are producing wildly. Deer ate most of the beets, but there are still some beet roots in the ground we can harvest.
There is still 9.7% unemployment in the county, but people know how to make frayed loose ends meet. They share garden produce with each other, work at small cash jobs to make the rent, and rely on spouses who still have paying work. So, hang on and look up to the Heavens, whence cometh our help.