Watching the market today was like watching a train wreck waiting to happen. Of course, everyone was giddy when the Dow Jones, Nasdaq, and S&P 500 cut their losses today (The DJ actually gained today. However, that does not mean that the effects of the credit crunch are over. This is the beginning of the end of the credit boom. How does this relate to the graph above? The more the Fed cuts its rate, there is more liquidity in the system, which means that there are more dollars circulating in the system, which means that the dollar itself will continue to lose value against major currencies. This happens while many Americans, including myself, watch as their monthly paycheck is doubly ravaged by inflation and devaluation. This is just plain bad and the train wreck has yet to complete its route. Oh yes, to be bitch-slapped by the Invisible Hand.
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