This wasn't supposed to happen. The week before Labor Day is notoriously slow with few, if any gains or losses for the week, but somebody forgot to tell that to the markets. It would appear from the upside action that we are once again going to run the S&P 500 Index back to the top of the range at 1,130. Whether we break that upside resistance remains to be seen.

I telegraphed readers that we could have a bounce this week but even I was not expecting this much upside.. The rally kicked off on Wednesday, the first day of September, and in just three days the indexes have gained more than 5 percent. Ostensibly, the trigger for this melt-up was some manufacturing data out of China and a positive economic report from Australia that indicated the world's economies were still growing. If you believe that, I have a bridge I want to sell you in Brooklyn.

Although it's tough to prove, I believe the real story behind the market's move is that this week's unemployment numbers were leaked to The Street earlier in the week. This would not be the first time (or the last) that government sources have dropped insider information on their pals within the financial sector. I guess when the government breaks the law its OK.

August's job report indicated that the private sector added more jobs than anyone expected last month, while the Labor Department revised its previously announced data showing even bigger private sector gains in employment were made in both June and July. That's good news for a market that is overly focused on weekly, if not daily, economic and unemployment numbers.

I've recently noticed that everyone has a pet idea on how to reduce the unemployment rate. Everything from tax credits to tightening immigration to make work programs FDR-style have been floated, discussed, critiqued and floated again. So I guess I'll throw in my two cents, given it's the Labor Day weekend. My idea, however, wouldn't cost the taxpayer an extra penny.

Let's say you've been out of work for a year. You are on unemployment but bored to tears, feel like a failure and have just about given up sending out resumes. Why not offer the next prospective employer a deal. You'll work for free over the next six months; that's right, for free, but after six months, if you are doing a good job, the employer pays you for the last three month's work and hires you.

Once agreed, it's all up to you. You've got six months to show your stuff - how hard-working, smart and dedicated you are. The worst that can happen is that you are let go, but in the meantime, you might learn a new skill, tool or trade and possibly unearth other job opportunities.

The employer, meanwhile, receives an added boost to productivity in the form of free labor (minus the start-up costs of training you). That could generate more business for the company in the form of sales and profits, which could help grow the economy. I tried out my idea on several small business owners in the Berkshires.

"I would go for that hands down," said the head of a local engineering company.

"Count me in," agreed the boss of a construction crew, "and if the person showed any sort of initiative, I'd probably pay him for the six months."

Every one of them said it was an idea they would support.

Of course, I recognize the issues involved. On unemployment, you are supposed to be looking for work, not working for free. There would be questions about insurance, possible legal hassles, etc. But possibly the biggest obstacle to overcome is the American attitude that we deserve a job, as opposed to working for one. It is not our God-given right to be employed.

There was a time when I desperately needed a job. Straight out of Vietnam and the Marine Corps, I was paying my way through college in Philadelphia while working on a journalism degree. Borrowing a suit coat and tie, I wrangled an appointment with the editor of the city's largest newspaper.

"If I don't get a front-page story in the next three months, I'll walk," I offered.

The hard-bitten boss of the city desk agreed and subsequently put me in a department that had never published a front-page story in the 100-year history of the paper. Three months later my front-page story sold out the evening edition. I got the job and a journalism award for the best human interest story of the year. It can be done. Try it.

There was a time when one of the rules of asset allocation was to always keep a little cash in your portfolio. Cash was the safest bet you could make. It became the place where we retreated when the markets were in free fall. Today, however, cash as an asset class, earns almost nothing. As a result, many individual investors are using that cash to trade currencies and in the process transform the world’s safest investment into something a lot more speculative.

The headline on the front page of Wednesday's Wall Street Journal read "Currency Trading Soars." The article explained that buying and selling currencies has become a $4 trillion a day market. How much of that volume is attributable to individual investors is hard to measure but from my own experience I can tell you that investing in currencies has never been easier or cheaper. Thanks to exchange traded funds (ETFs), the average Joe has his pick of 44 currency funds that are as easy to buy and sell as individual stocks.

Here in America, where since World War II we have been accustomed to having one of the world's strongest currencies, the desire to invest in other country's currencies has not been high on the list of investment priorities. The currency markets were something that banks used to square up their overseas borrowing or to provide you the necessary currency for your vacation to Hong Kong or Spain. It has only been in the last few years that Americans have begun paying attention to the dollar and its overseas purchasing power.

In other countries, where the fluctuations in the value of their currency can mean the difference between a secure future and poverty, trading in and out of currencies has been a way of life and a traditional avenue of investment. With the introduction of internet trading, ETFs and around-the-clock trading, retail investors in places like Japan, China and throughout the Middle East make a career of day trading currencies.

Clearly currencies markets offer the investor more depth. The currency market, at $4 trillion per day, dwarfs the trading in stocks which is only $130-$140 billion per month. The bond market is much larger and averages $456 billion/day but is still less than half the size of the currency markets.

"The stock markets are totally manipulated by a handful of big players. Bonds provide me less than the rate of inflation. Currencies, on the other hand, can make me a lot of money if I’m on the right side of a trade," argues one retired, ex-Fortune 500 executive who trades currencies by buying and selling ETFs.

During this summer he shorted the dollar (bought an inverse U.S. dollar ETF) and went long the Yen (bought a Japanese currency ETF).

"I made more money in currencies than I made in stocks since April," he crowed.

Although I congratulated him on his investment prowess, I also warned him that he was swimming with the whales in currency markets. Banks, hedge funds and mutual fund currency departments with trillions to throw around can outgun him money-wise, volume-wise and information-wise. These boys also have 24 hour trading departments. If the Japanese government were to suddenly intervene in their currency market, sending the yen dramatically lower (and the dollar higher), my friend could easily wake up tomorrow morning to a sizable loss before he could do anything about it.

This summer's collapse in the Euro was largely triggered by hedge funds. Riding the hedgies coattails works but only until it doesn't. The retail investor was the last to know when those big dogs reversed that trade. My advice to the majority of investors is to keep your cash in a money market and not try to speculate with it in the currency markets.

A better bet would be to buy a country fund or ETF if you believed the prospects of the country were better than most. That way, if you are right, you get a double win both on the country's currency and on its stock market.

The markets were so oversold by Friday that even a hint of positive news was enough to send stocks higher. The trigger was the revision downward of the nation's gross domestic product to 1.6 percent for the second quarter. The initial GDP reading had been 2.4 percent.

"Why is that good news?" asked a perplexed client from Long Island.

"The revision could have been worse," I explained.

Federal Reserve Chief Ben Bernanke also helped push stocks higher by throwing the market a few straws of reassurance. He said he would consider another large scale investment in the markets if the economy deteriorated further or if deflation became a problem. At the same time, he said it might not be necessary because he still sees the economy growing next year.

The Fed has three options to further add liquidity to the system. They could buy more government bonds and possibly mortgage backed securities and drive mortgage rates even lower than they are now. A 30-year, fixed rate mortgage is now below 4.5 percent. In this atmosphere of uncertainty, they could further clarify exactly how long they expect to keep interest rates near zero. To date, they have only said rates would be low for an "extended period."

Finally, they could cut to zero the interest rates the Fed pays banks to park their reserves at the Fed. Right now they are paying 0.25 percent. That might seem a nominal sum to most, but when you have billions of dollars sitting there, that quarter of a percent adds up. This last option, I believe, is the key to getting out of the liquidity trap we find ourselves in.

For the last year and a half, the Federal Reserve has been dumping mountains of money into the financial system, hoping that the banks and corporations will in turn lend it to consumers and use it to hire workers, build new plants and buy equipment. Instead, financial institutions have been hoarding the cash and getting paid by the Fed to do so.

Why? Given the uncertainty of the recovery, the high unemployment rate and the risk of even more bad debts coming through the door, the banks believe it is better to keep the cash then risk losing it on future bad loans or, in the case of corporations, on hiring workers that they won't need in a double-dip recession. Fear is the name of that game.

"Play it safe, after all," they say, "a 0.25 percent return is better than no return at all."

This monumental timidity in the face of 9.5 percent unemployment and a housing market that is tipping precariously back into a downward spiral should be unacceptable to all of us. So how do we get the banks to lend again?

Simple, instead of reducing the rate the Fed is paying to zero, make it minus 1 percent or 2 percent. That's right; in order to park your cash at the Fed instead of lending it out, it's going to cost you. I believe faced with losing 1 to 2 percent on their money or risking it by lending to you and I at 5 to 6 percent, fear will turn to greed. This good ole American financial system will begin to work for us again instead of against us.

In the meantime, we are bouncing around the 1,050 level on the S&P 500 Index. I still maintain that 950 is in the cards. It's simply a matter of time before that occurs. I know this five-month trading range is frustrating to investors but patience will be rewarded, possibly as soon as September. The doom and gloom is building but has not yet built to a crescendo. We may well get another bounce this coming week but once again it will be on low volume and will simply be another bear trap, so don't be fooled.