Admittedly, IÂ am more stupider than a lot of people when it comes toÂ finances.Â Â So someone please tell me how the stockÂ market really works.Â See,Â I thought the stock market reacted to what is going on in the economy.Â I didn’t realize it was the economy.Â Â
Apparently, I was wrong, because the Federal Reserve has announced an emergency rate drop to “fix” the stock market.
The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, slashed a key interest rate by three-quarters of a percentage point on Tuesday and indicated further rate cuts were likely.
This move is not an instant fix,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics
“Fix” is actually the perfect word.Â Markets can beÂ “fixed”Â kind of like a fight or the World Series can be “fixed”.Â
So let me get this straight.Â We (individually and as a country) have borrowed too much money, which has us headed towards a recession.Â The obvious solution?Â Lower interest rates to banks, which allows them to lower interest rates to consumers, which allows them to borrow more money.Â Makes sense right?Â Right?
“You can’t borrow your way out of debt”–Dave Ramsey
So rest easy tonight, all of ye lower and middle income Americans.Â Though the cost of milk, gasoline, and Coors Light doth drift higher whilst thou income remaineth the same,Â panicÂ disturbs not the slumber of bankers, barons,Â and brokers.Â Â So long asÂ theÂ DJIA remaineth propped by policy, politicians, and ponzi schemes, you need not be troubled by the frightful prospect of competing on a level playing field and moving forward.
Ah, what the hell!Â You canÂ just put it on your credit card, right?Â Rates have never been lower!!!