As I write this blog, I have just spent a rather interesting day in the tiny Principality of Monaco located a short 20 minute train ride east of Nice, France. Multi-million dollar yachts all with fancy names registered in the Cayman Islands bob eloquently up and down in the marina as the gentle waves of the Mediterranean lap against their hulls. As I sat outside the historic Cafe de Paris sipping a very pricey Espresso I marveled at the steady parade of Lamborghinis, Rolls Royces and Bentley's that glided by on the street in front of me. Off in the distance the Monte Carlo Casino evoked images of James Bond (Agent 007) sitting at the gaming tables.

Remember Harry Dent? If not, go to your local bookseller and order a copy of the Roaring 2000's. I first read this book right after Y2K – the biggest non-event ever. But what intrigued me with Harry Dent was his look into the future. He predicted that the first 10 years of the new millennium would be a rip-roaring event that would see financial markets zoom higher. Was he right? Well, partly so. What he failed to see was that people would opt to chase real estate purchases instead of stocks and mutual funds. But, that being said, the DOW and the S&P actually did do quite well. They just did not go as high as he thought. Mr. Dent now admits that he did not envision Oil rising through $100 a barrel and he did not envision in 1999 (when he wrote the book) that we would find our way into a sub-prime mess. To his credit – who could have envisioned such a thing back in 1999?

In some of my recent writings in my Commodity Supercycle Report I penned an argument that said this week Ben Bernanke would take a cautious stance on the interest rate front. I argued that with inflation running at 4%, the Fed was flirting with negative real interest rates. I called for a cut of 25bps, 50bps at the very outside.

Well by a vote of 8-2, the Fed proved me wromg and opted for a full 75 bps cut. The Street rejoiced as this fresh hit of crack cocaine induced a feeling of delirious pleasure.

This week also brought news that the Fed in a side-deal injected more liquidity into the system and set up a deal with JP Morgan to put Bear Stearns out of its misery. Now there is talk of a shot of cocaine for the depressed Fannie Mae. Soon Fannie shall be smiling as she walks about in a state of happy delirium.

Where does it all end? What if another investment bank hits the skids next month. Does the Fed slash another 75 bps?