we're going to six

The Dow went down in the 7,000 range today. Just as I predicted a while ago. And we are not done yet. I am sure we will go into the 6,000's before long. I also think the threat of deflation is now very real. The administration keeps on saying the chances are low, but they also said the American economy was fundamentally sound. I think it is fundamentally flawed.

They also said a lot of other things that make no sense, like housing prices always go up, and any housing market is local, and we may go into a recession -we already are-, and we should invade Iraq, and they have WMD's. Fortunately the administration is on its way out. The new one promised change and we will give it the benefit of the doubt, at least for now. Don't hold your breath though, you might suffocate.

Believe it or not, but what is happening in the market is good news. I say that even though my savings and retirement accounts are losing money like leaky sieves. I am somewhat worried too, but ultimately I see it as a sacrifice for the common good.

We are going to become more frugal and any sane environmentalist needs to applaud such a move. Unfortunately, in an economy that relies on consumer spending, that means great and widespread pain is inevitable. But the end result can be a good thing. It's a bit like giving birth. It hurts but in the end it is worth it. 

What we need now is for someone to step in and raise gas prices. I know many of you think I am crazy for saying this, but it is necessary. Like a cigarette tax, we need to get people away from gas and energy waste. The sooner we do so the better. I hope -but doubt- that Obama has the guts.