Early Retirement Blog

Everyone, let’s all toast the Federal Reserve today, and I mean that in the nicest way.   The decision not to raise rates by the Federal Reserve, and the Treasury’s decision not to bail out Lehman Bros. over the weekend, should put to a close the latest ugly chapter in this credit crisis novel.   Not that more dangers don’t lie ahead, they most certainly do, but with this decision we can all exhale and begin breathing again.

Today’s decision marks a significant turning point, in the more than year old credit crisis saga, and signals to our creditors, that the U.S. Government is willing to behave responsibly.   Since the credit crisis began, the Fed and Treasury have acted to protect their crooked friends on Wall Street, the same thieves who got us into this mess, at the expense of the American economy, American people, and most importantly the foreign investors, without whose support we would all be in soup lines right now.

Now, don’t get me wrong, the Federal Reserve and Treasury, would love to keep on screwing the taxpayers, retirees, small investors, and foreigners, to keep on bailing out their friends on Wall Street.   The problem for the Fed and Treasury, is that it is no longer an option, Wall Street bailouts stopped being an option, when our foreign creditors stopped lending the U.S. Government money after the Federal Reserve did not raise rates at their last meeting (read Fannie Freddie and You). Foreign investors almost immediately began withdrawing money from the U.S. economy.

That is why there were no buyers, foreign or domestic, for crippled Lehman Bros.

Lehman Bros. approached the Treasury, fully expecting a Bear Stearns bailout, and were smacked down.  Wall Street demanded that the Fed reduce the Federal Funds Rate by 50 basis, threatening chaos if they didn’t, and today the Fed finally told their thieving friends “Sorry, no can do.”   Because – they can’t.

America has been forced to turn over it’s economic decision making, to foreign investors for the time being.   And considering the corruption and mis-management of our economy by the current regime, it is probably a good thing, in the meantime the world will wait for Obama.  If McCain gets elected, you may wish to look into retiring overseas, yeah the consequences are that bad.

In any case, for people living in retirement on fixed incomes, today’s decision means that your income will not be going down again.

The U.S. Stock Market just closed, yup they’re up and Barclays has agreed to buy a piece of Lehman Bros., everyone Let’s Toast the Fed.