When I was growing up Kick the Can was the name of a fun children's game!  If I remember correctly, it was introduced to me by my relatives in Kansas.  Well, kicking the can does not mean what it used to.  (I suppose this is sadly true for many things in life.) 

It appears the markets are starting to expect some type of additional monetary stimulus from the Federal Reserve.  After the release of the minutes from the last Reserve meeting, it was made known the topic was seriously discussed.   If you recall, at that meeting the Federal Reserve decided to keep interest rates very low until 2013.  I would also expect our President's jobs plan, which is to be announced soon) will also end up costing us money?  I am hoping it will add more to the economy than it subtracts.  (Optimism folks, optimism.)

I am growing weary of repeating myself, but what more can I do.  Here is a quick summary.  We have to grow our way out of this debt problem.  Government does not create jobs, and if they do they are more the problem than the solution.  Government can implement programs that incentivize businesses to; spend, borrow, grow and employ, but this great system called Capitalism does that already.  Spending more only alleviates the problem temporarily, but does nothing to solve our long term debt problem.  Excessive regulation only constructs barriers to entry for those who want to enjoy what Free Market Capitalism has to offer.  There are serious side effects to spending more and more.  We are experiencing some, as I have referenced before in the prices of food and energy.   Remember my earlier rants about cost push inflation. 

The US Dollar Index is approximately at 74.15 as I write this on August 31, 2011.  It seems to be fluctuating around this level for weeks as Europe's problems seem to have put a nice (temporary) floor underneath the Index.  There have been many countries throughout history whose solution to inordinate amounts of debt was to devalue their currency and pay bills with paper currency valued much less than when the debt was initiated.  This strategy has not worked out well for those debtor nations.  Our future path has not yet been decided, but unfortunately our actions will eventually limit our decision making ability.

As I look around I see cell phones plastered to our ears, and more people texting than eating at restaurants these days.  The evidence of technological innovation is enveloping us.  I often yearn for simpler times where a group of children could innocently play a game of Kick the Can, or Hide and Go Seek.   Well, kicking the can down the road is much more dangerous than it used to be.   I sincerely hope the adults in charge will come to their senses and restore order to the chaos.  I am not holding my breath, and even if I were my lung capacity isn't what it used to be!

Written By: Daniel Petrey, CFO, MBA