It is now official: The Federal Reserve is in a panic and has no idea what to do next.

The three-quarters-of-a-percent interest-rate cut announced on January 22 surprised just about everyone. It was the largest single cut in 24 years, and it came after an unscheduled meeting. Then, just a week later, they announced another half-point reduction.

If that doesn't spell panic, we don't know what does.

But it's important that you don't join the panic! So in just a moment, we're going to talk about three smart money moves you can make now in this volatile time.

One of the catalysts for the Fed's cut was a meltdown in world markets earlier in January over fears that our economy was is in serious trouble. Japan's Nikkei index tanked almost 6% in one day, the biggest drop in 10 years. Australia shed 7%, and in Hong Kong stocks fell almost 9%.

This underscores how widespread the U.S.-manufactured subprime mortgage mess really is. Bet you didn't know that we could take down the world without firing a shot or dropping a nuclear bomb. What a shame our pin-striped army of investment bankers didn't sell this junk to Al Qaeda while they were at it. The war on terrorism would have ended today.

What To Do Now

If you've been visiting us regularly at Dolans.com, then you know we believe that the U.S. is already in a recession. (Read why in our last Fed update.)

While we were surprised to see the Fed cut rates before the next scheduled meeting on January 29, the move doesn't change our outlook. The only thing that's different is that the rest of the world, including the Fed, is now catching up.

As always, our goal here at Dolans.com is to help you make smart decisions about your money. So today we have three moves you can make right now to not just ride through this very volatile time, but come out in better shape when it's all over:

Page 1 2 Next »