Imminent Probability of Recession

Things looked really ugly this week from an economic standpoint. The tanking of the stock market has been hard for investors like myself to swallow.

The comments on Thursday from Fed Chairman, Bernard Bernanke, were not encouraging to those of us interested in seeing what true economic stimulation ideas he feels would be helpful to stabilize our economy.

The proposed plan of rebates to encourage the debt-strapped consumer to go out and spend some more money on Chinese-made imports is not going to do much in my opinion.

What we need is investment in creating something that satisfies true global demand such as alternative energy products, next-generation transportation, mass transit systems, medical break-throughs for diabetes, breast cancer, colon cancer, etc.

A structured, transparent, plan of Fed funds rates would be helpful to business investment. If the Fed were to announce that they were taking down the Fed funds rate to encourage business investment for solid business loans and potential homeowners with solid credit then we might see a softening of the downward spiral. The rate should be set for a specific time period with the announcement that 1/4 quarterly adjustments upward would follow until the rate met the risk-adjusted 10-year average rate of inflation.