The current economic environment is downright awful. Our Fed. Chairman, Ben Bernanke is tripping at the pump in an attempt to juice up the economy. Unfortunately, there’s only so much he can do. Lowering the interest rate to 3.5% doesn’t leave much room for additional stimulus in the future.

We could learn a few lessons from Japan’s struggle to get the train moving again. The Japanese lowered their rate all the way to 0.0% and they’re just sitting ducks trapped in a corner. Now, I do realize that there are other factors involved with their unique dilemma – one being their aging and declining population as well as their unwillingness to spend on a level that we here in the States do.

I’m sure President Bush is pleased that the economy is buckling toward the end of his second term. Of course, I say this with a sarcastic tone. But then again, I believe it’s fair to ask ourselves: Were we on a sustainable path to begin with? We can only mortgage our future for so long before the bills eventually need to be paid – and I think that’s a good analogy for what is beginning to take shape.

Are we in a recession? Not yet, but we’re probably only one shock away from one.

It’s sad to say, but as American influence wanes, once dependent Asian tiger economies, including China and India, will begin to pick up the purchasing slack. Soon these countries will begin to realize that while America is an important market and influential on a global scale, it is no longer the sole engine for economic trade and growth that it used to be.

If the growth in our markets is only be elevated by the Federal Reserve’s drastic cuts in interests rates, then we are in trouble for the foreseeable future. Given this economic outlook, I will continue to include more shorting and put option plays until the technical barometer signals me to be bearish again.