Fed Meeting Day 1...

So it begins... the two day Fed meeting that investors have been waiting for. For the last couple of weeks we have traded in a range with the market unclear as to which direction to follow. Flee with the bears, or run with the bulls?

The Federal Reserve has been anything but quiet in this crisis and has shot every type of arrow at this beast of a depression (let's start calling a spade a spade) we're currently battling, yet nothing seems to be working.

If you ask me the Fed needs to step back and let the free market fix itself in the coming years, but that's not going to happen, those that tinker will continue to do so, and this roller coaster will continue through the peaks and troughs that give us all that weightless feeling in our stomachs.

Question is, which way the Fed will nudge us this time? There has been talk about QE3, and if you read this blog you know how I feel about it... on a scale of 1 to 10... I give it a generous 1, but I digress... then there has also been talk about operation twist which is using capital generated from mature short term debt to buy newly issued long term debt. Not really addressing the real problem but "okay." This balance sheet move isn't really going to solve anything but it will help keep interest rates low for the time being which the Fed believes will help spur the economy. Considering we have been operating in a low rate environment now for the last two years, I doubt this is going to have any real effect.

Hmmmmm.... the Fed is running out of options, perhaps they need the two days so they can brainstorm some more possible solutions.

It's a mess out there, contrary to what you hear from the mainstream media, and it appears to be getting worse. Europe is a hay bail covered in kerosine, Greece is soon to be known as the Country formerly known as Greece, and our Fed is naive enough to believe opening their window and pledging dollars will solve the Eurozone's problems. The problem is the Eurozone, and the longer we perpetuate it, the worse things are going to get.

Right now we are witness to the first economic world war... in which all major economies are racing to devalue their currency in relation to all others. This is fine for governments, but when this action plan hits main street and real inflation takes hold, we may actually see politicians tried for treason as our net worth dwindles into oblivion due to their chosen monetary policy.

An interesting reflection which has terrible consequences on every man woman and child that is not in a position of power. We should be very mindful of what the Fed decides to do moving forward.

Mark my words.