The Federal Reserve, along with the central banks of the European Union, Japan and Britain have flooded their respective economies with surplus cash.  The result has been expanding national debt, which is at historical highs. 

America’s debt is near $18t.  This was made possible by decades of irrespsonsbile budgeting as well as the U.S. Federal Reserve keeping the printing presses (Quantitative Easing) working overtime.  The bulk in the growth of their money supply in the last few years has been created for no other reason than to purchase their own short-term debt in order to keep U.S. interest rates at historical lows.  The Federal Reserve has announced that Quantitative Easing is over and they will now begin withdrawing money from the system.  Do not believe it - it is next to impossible for this to occur without interest rates jumping.

Insead, the printing presses will be working overtime for months to come, or, until Washington is forced to correct the financial mess it is in.  Washington, for years to come, will have to pay close to a trillion dollars annually in interest.  This is cash they do not have, other than via the printing press.

Governments cannot dictate interest rates; the market does it for them.  If this was not the case, lending rates would be uniform across the globe no matter the economy.  The stock markets, which are leading indicators, are telling us that things are not rosy in the immediate future.  If you choose to jump into the market tomorrow, make sure it is in companies that will continue to supply society’s needs, as well as one that offers a dividend yield around 4%.  Or, you can continue to be patient and wait for this market to unfold.  Sacola continues to favor cash for the time being.  Sit tight and check back on November 15^th.