Well, if you've been reading the blog for awhile, you have seen me preaching about conserving your assets, 'cause bad things are going to happen, and, if you haven't already, you definitely should be preparing to weather a huge economic storm that is coming. The writing has been on the wall for a couple of years, but now it is becoming fashionable to admit that the US is experiencing some financial problems.
This morning the New York Times laid out the economic facts very clearly. They conclude that the worst is still ahead. Please read all three pages of this article... http://www.nytimes.com/2008/07/19/business/economy/19econ.html
"Follow the Money" is a good rule to use when figuring out why it happened.
The important thing to realize, is that sitting back and hoping that things will get better, is not enough. It is time to adopt a "bunker" mentality about coping, for you and yours.
Also, any thoughts you may have about the government being able to fix this mess, should be chalked up to wild optimism. The government is out of money. Any fix-it, will come from new borrowing. It is beyond me that any foreign country keeps loaning money to the US, as the dollar continues to crumble. (In January of 2001, it only took 91 cents to by a Euro, now it takes $1.59--the math is devastating.)
China, Saudi Arabia, and Canada are the big three buyers of US Treasuries--now do you feel better, or worse?
As fighter pilots are fond of saying "It is now time to watch your six",