George Washington Says: Why are you killing my money?

So now the word on the street is another rate cut is coming.

So #1 rule of investing is NEVER FIGHT THE FED. OK I don't know if that really is the #1 rule, but anyone who's seen Fight Club knows what I'm talking about. So the FED has decided - once again - to say f**k you Dollar, we will save Wall St. billionaires at all costs. Can someone point to me where in the Constitution it says stocks can never fall? Anyone? Bueller? Fry? McFly?

What is happening is the Fed is destroying he $US in order to artificially prop up stock prices. While your (Mr. and Mrs. middle class American) purchasing power is being wiped away, Goldman Sachs is making an extra $500M profit.

Now don't get me wrong, I am not saying companies should not make profits. I love profits, the more the merrier. I love capitalism and free markets, the freer the better.

However profits should come from operating a business wisely and not from a handout like a rate cut. What the Fed is doing is putting a 12th man on the field for the defence and kicking the QB in the groin on every down for the offence. It is wrong and it goes against everything the Fed is supposed to do, namely keep I-N-F-L-A-T-I-O-N under control. The Fed's mission is not to keep the Dow Jones at 14,000.

So following rule #1 this is what we do (aside from complain on blogs):

a. Buy up bank stocks. When interest rates fall, banks do well. Yes banks will have mortgage exposure. But as a % of their lending mortgages are pretty small. I like Bank of America myself.

b. Buy metals. Gold and Silver are most obvious. They will be volatile, they always are. But with another rate cut coming it's about as sure a bet as you can get. As I said before SLV and GLD are the best ways to play this. You can buy mining stocks as well, but again, riskier. SLV and GLD are like buying a gold or silver mutual fund vs. individual stocks. You can also of course buy physical gold, never done it myself, seems complicated and not needed.

c. Sell dollars. Easier said than done. Playing in the FX (foreign exchange) markets is expensive and very risky. I personally don't do it, but will look into it now.

The dollar is almost below .70 and Bernake is talking about cutting rates again. My only conclusion is he did not listen to Whitney's advice and took the crack, as whack as it is.