What a week. I've spoken to many people over the past few days about my thoughts on everything that's been happening and what it all means. It's hard to explain the ramifications of the past two weeks in a single conversation, but let me try with a simple story.

An enormous cruise ship was created a few years ago that was going to be the gold standard of luxury. The ship, named TitanicAmerica, was filled with happy people looking forward to the amazing lifestyle the ship would offer.

Instead of building an engine, the captains decided to hire other ships to pull TitanicAmerica. There were many ships hired to pull, some of the bigger ones were The Japania, The Chinia, and The OPEC Nationia. These ships filled their boat with working crews not only to power the ships, but also to work to feed the TitanicAmerica during its travels.

And so the TitanicAmerica set sail one lovely afternoon. It was business as usual for the cruise line for many years. The other boats would fish all day long and bring the food over to the TitanicAmerica to serve them a royal feast. During the day the other boats had crews in their lower ships shoveling coal and working hard to keep the great cruise ship at it's desired pace. In return for all their hard work every day the workers received a paper IOU that they called a "dollar." These dollars were backed by nothing but redeemable for something tangible in the future.

Then one afternoon there was a fire in the lower deck of TitanicAmerica. In order not to alarm the guests aboard, Commander Bernanke and Commander Paulson did the only rational thing they could think of. They took a sledgehammer to the side of the boat to let in water and put out the fire. This worked quite well until more fires started to spring up. Using their intelligence they quickly smashed more holes into the side of the ship to put out the fires. Then there was an enormous fire one afternoon that they called the fire of Fannie Mae. In order to put this one out they tied some explosives to the ship and blew a huge hole letting in an enormous amount of water.

The people on the top deck continued with their lives as if nothing had changed. However, something had changed for The Japania, The Chinia, and The OPEC Nationia. As the water started to pour into the TitanicAmerica it was becoming much more difficult to pull them at their same speed. They started to slow down due to amount of effort it took to drag along the sinking ship with its work crews.

Looking at this situation, what would be the best option for the other ships pulling the luxury boat? If they stop towing the American ship they would stop receiving their IOU's. However, some of crew members were starting to get nervous that the people on TitanicAmerica actually did not have something to pay back. They realized that the other ship had no fishing poles and it had no engine. It only had people on board that ate the food they worked hard to fish for every day.

Obviously, the best option for the other ships is to cut their tows and leave the TitanicAmerica. If they do not, eventually even their ships will get pulled down into the water. After a few days of being confused at not having to feed the Americans, the people on board will find out that they can just fish for an hour a day to feed themselves and spend the rest of the day sunbathing and relaxing.

The TitanicAmerica at this point will realize that it wasn't the fire in their ship that they had to be most concerned about, it was keeping the lifeline from the other ships that was keeping them from drowning.

This is what's happening right now in the global economy. The Fed and the government are trying to put out every fire so people will not start to smell the smoke and understand what is going on down below. The past two weeks were the equivalent of setting off dynamite in the side of our ship.

A few people understand what is happening and are jumping into lifeboats and swimming over to the foreign boats. (Foreign Markets) The people on board the TitanicAmerica laugh at them as they paddle away telling them that the foreign markets are starting to slow down as well. They do not understand that it is because they are hooked onto the sinking ship that they are slowing down. Once they let go, the TitanicAmerica will begin to sink and there will be a panic to get into a lifeboat.