The Dow Jones was off better than 280 points yesterday, I think we have closed below 6600, the lowest level since 1996. That is just the nominal decline.
Because if you want to look at a real price for the Dow adjusted for inflation you have to go further back than that.
Gold was up around 30 dollars, we are back around 920. The dollar though is still firm. You had the ECB cutting rates from 2% to 1.50%, the Bank of England cutting from 1%to 0.50%. So you have more central banks cutting rates.
At least the Australian Central Bank last week did not cut rates, which was a surprise.
I wonder when these central banks are goinf to realise that the rate cuts aren`t helping. Just because your economy is contracting does not mean you should cut interest rates.
Sometimes economies need to contract. There is a reason for the contraction. The government should not try to stop that from happening, they should allow it to run its course.
Peter Schiff is the President and Chief Global Strategist of Euro Pacific Capital. As a result of his accurate forecasts on the U.S. stock market, economy, real estate, the mortgage meltdown, credit crunch, subprime debacle, commodities, gold and the dollar, he is becoming increasingly more renowned.
He has been quoted in many financial TV channels like CNBC, CNN, Fox News, Fox Business Network, and Bloomberg T.V..