Oh Great Another Chance to Buy a Plasma TV

Have you heard the news? You might be receiving Round 2 of the desperation, I mean, rebate checks that Washington so desperately wants you to take and spend. Wait a minute. Didn’t Congress also say that they were concerned about the saving rates in America? Oh yeah, that was a sound bite for another time. Today, we need spending at whatever cost.

Congress is actually considering sending out another few billion in free money. I am no historian, but I would challenge anyone to find a time in history where so many extraordinary things are being done to save an economy that every lawmaker says is strong and has good fundamentals. If everything is in good shape, why the heroic measures? Let’s face it, we haven’t even seen a negative quarter of growth and they want to send out more money. I guess that’s one more band aid before November in order to boost those numbers.

Is it just me, or are the politicians completely out of control? When I think about it further, maybe they are not out of control – maybe Congress is so desperate that they are trying everything possible to postpone the inevitable.

Then there is Treasury Secretary Hank Paulson and his bail-out, oh sorry, I mean confidence building plan for Freddie Mac and Fannie Mae. Let’s see…everything is fine with the two companies. They are well funded with no problems. However, we need to make sure that we can give (read: print) all of the money that they need to carry out business in the event that they do get into trouble.

Then there is our Federal Reserve Board Chairman. I cannot believe I am going to write this. Is he the only realistic guy in Washington? He is the only one that has anything negative to say about our economy right now. There was a time that if the Federal Reserve Board Chairman said real negative things about the future of the economy the markets would tank. This happened this past week and the stock market took off as if someone captured Bin Laden. Could it be that no one really cares anymore about the Fed Chairman?

Maybe the new voice of manipulation is Treasury Secretary Paulson. Over the past year, he is the one who has moved markets by arranging for the bail-out of Bear Sterns, announcing many different housing bail-out plans (none of them have worked), and now his words moved the markets on the bail out plan for Freddie Mac and Fannie Mae.

Lots of desperation and reassuring words. Watch their actions and ignore their words.

Copyright © 2008 Prudent Money and Bob Brooks. All rights reserved.