You could easily put my knowledge of economic policy in a teaspoon and have room to spare. I know when my bank account is overdrawn and I have a 401K retirement plan that will fully fund my retirement for up to two weeks. Beyond that, my economic depth is on the shallow end of the pool.
But I've watched the stock market the past two days and I can recognize when stocks are losing money. One expert said that investors and stock holders were losing billions of dollars with the rapid decline in the stock market.
And all of this massive drop in financial footing is a result of Federal Reserve Chairman Ben Bernanke who "spooked" Wall Street with his cautionary comments on inflation. Now Bernanke didn't say he was going to raise rates through the roof. He didn't say it was a good time to put your money in a jar buried in the backyard. He said - and I quote - "the central bank will remain vigilant in fighting inflation".
One leading expert in financial analysis said, "What Bernanke said the other day is the pin that hit the balloon." What the hell are these people talking about? They are obviously speaking a language that I clearly don't understand.
Just so I get this right - the fed chief says that the money experts should keep fighting inflation and that means that some investors - including my massive retirement plan - lose their shirt? Can you imagine what would happen if he said we're going to raise rates immediately? Bill Gates would be selling pencils on the street corner and all of those investors in Wal-Mart would actually be shopping there!
Maybe, just maybe, we put too much power into the hands of this one financial guru. If a man can make a simple comment that causes equally smart people to lose their money, then maybe we should put a muzzle on Bernanke.
I liked Alan Greenspan. No one ever understood a single word he said so the stock market just found its way by itself. If a company made money, the investors were rewarded. If a company lost money, the investors pulled their bucks and headed to greener pastures.
As I mentioned earlier, I know too little about investing to even discuss the topic. But in order to stay current at the coffee shop, I try to understand just enough to be dangerous. But I clearly don't understand how much money can be made or lost with the comments of one man. The President can address the nation and tell us our economy is strong and the stock market loses money the following day. Bernanke can say the weather is nice and the stock market fluctuates in an attempt to determine what he actually meant.
As for me, that jar buried in the back yard is looking better every day.