One More Big Drop Before We Have Clear Skies

That’s correct, I’m calling it.  Back in 2001-2002, we had over a 25% drop, then it went up, but it followed another huge 20% drop in the DOW market.  These two drops happened in a span of one year.  We’re facing a loan crisis that we should seriously not be able to come back from.  Japan attempted to bailout their country in the 1990s and still continue to face a stagnant economy that never fully recovered.  We just made a $1 trillion bailout plan to help fix the mortgage security problem.  The money does not exist, but the government is asking international parties, international banks, private investors and forcing tax payers to front some of the amount.  Suffice to say, we are the heart of the economy to the world.   We will survive and will come out stronger.  However, this might be the last time we get to push around other countries to help us.  China will continually try to move their economy from a US export economy to a domestic and international power house.

Back to the DOW, many analysts say we are bottoming out.  However, look at the 1980s oil crisis, you will also notice a 10% drop, a rise, and then another 10% drop.  We will face not only another drop, but possibly more than one.  Obama has been doing a great public campaign to persuade the people that there are better days.  We will survive this problem, but it’s not over yet.  I suggest investors continue to hold their cash in the bank or put it in CDs.  Wait some time to see where things go.  You’ll have a nice nest egg eventually to put in the stock market, but now is not the time.