Worried about America’s economic future
I am writing now to alleviate a little stress. I have been stressing out today over the stock market. The S&P 500 was down about 7% today at the close. My wife and I lost a substantial amount of money in our primary retirement account. A couple of days ago, I tried to move all of the funds out of the S&P index and into money market funds in anticipation that the market was going to break down form support. When I tried to log into the website to transfer the funds, it rejected the username & password. Come to find out, the company had switched the website used to manage your account online. As a result, you needed to re-register on the new site before you could move money around. I didn’t get the new account setup until today. I moved all of the funds to money market today. Unfortunately, the market has been going down the last several days erasing about 15% of the account’s total value. I have been very stressed and pissed off over the event. Up until this point I have been quite successful in moving the funds between money markets and S&P index funds. Our largest account was up about 8% so far this year even though the S&P is down about 40% over the same period. Had I been able to move the funds on the day I wanted to, we would have saved tens of thousands in losses.
The market looks like it is in free fall mode with no bottom in sight. These are becoming very scary times. People on television and the internet are starting to warn that America is going to collapse. Some people think we are going to be rioting over food and taxes within the next couple of years. I have a hard time believing it will get that bad, but who knows? Maybe these people know something I don’t.
The fact of the matter is that although everyone expects things to get very bad, our local economy around Buffalo seems just as stable as any other time. The mall parking lots are still jam packed with shoppers as if there is nothing to worry about. I don’t know if these people are being naive or if I am being unrealistically pessimistic.
I have this burning feeling that the Federal Reserve is pumping too much money into the economy right now. I think that this excessive monetary stimulus is going to come back to haunt us in the form of hyperinflation in a year or so. I am positioning our investment accounts to take positions in precious metals especially gold. I have a feeling that gold is going to go on the ultimate bull run once people realize how worthless the American dollar is becoming. Where else could you invest you money? Time will tell if my hunch is correct or not. I just hope that I make the right decisions over the next couple years to allow us to be in a decent scenario upon which to re-grow our retirement funds.
I am convinced that our law makers and economists at the Federal Reserve wrongly assume that they have ultimate control over our economy. One thing that seems to evade their thinking is that no economist can control a person’s thinking. They can influence them, but they cannot ultimately control them. I say this because law makers are always talking about what policy changes they can make to get people to buy homes again. Duh! If someone doesn’t want to buy a home, how exactly, is some politician going to make them buy one. Nobody can make you go to the bank and get a loan for a new home. It is people’s own decision to do so. I think the housing crisis is very simple. Prices have been way too high for way too long. Once the housing prices fall low enough, buyers will come out of the woodwork. They won’t be able to resist the bargain prices. Until that happens, the American housing market will remain very sluggish. It is that simple.
Very well put. I agree 100%. Our retirement account has lost half of it’s value over the last year. It will probably take us decades to get that back. So much for buy and hold.