Can You Hold Your Financial Breath for Two Days?
Today and tomorrow are set up to be quite tumultuous for the world of personal finance. The new look of the House and Senate may determine whether federal income taxes (for those of us who pay taxes) will go up on January 1. Of course none of our chicken-sh— politicians wanted to vote on tax rates before the election, but no surprise there.
Tomorrow the Fed Open Market Committee meetings end. Some announcement is expected about new strategies for stimulating the economy, likely through a plan of “quantitative easing.” This is the politically correct phrase now being used to describe what the Fed may do to apply inflationary pressure by increasing the money supply. I prefer the term “monetizing the debt” which I have written about earlier.
I think the Fed will make this happen because that’s what Bernanke has suggested. But there will be dissent among the committee members. The only real question is whether the Fed will announce how much money it plans to inject into the system tomorrow, or whether it will do it piecemeal.
This is why I bought more TIPs last week, even with a negative yield.
What are your plans for responding to what could be two days of financial uncertainty?