United States Economy, looking very bad in the short term.

Anybody who bought Bear Stearns last year when it was trading at $159 a share at its high has lost a bit of money. In fact the stock has gone down to $3.50 a share and it may go down even more. There seems to be a frenzy of selling and panic with regard to banking stocks with no one really sure what happens next. The only indicator of what might happen is a historical one as in 1929 many banks just collapsed as all ran to pull out there money at once. That crash started the great depression and the economic chaos that fostered WW2. The extent of that crisis is unlikely to play itself out as there are federal checks and balances that were enacted just to avoid another extreme crash. Those checks and balances did not stop Bears Stearns from almost collapsing. It was only saved by emergency intervention by the Fed and a buyout from J.P.Morgan. If you consider salvation  a stock that went down 66 points in 2 trading days to about $3.50

This money crisis in the US is turning into the worst crisis since WW2 or even since 1929, depends on who you ask. As Gold seems to go up by the hour and oil seems to hit new highs every day the US dollar is plunging. It is at its lowest level against the Yen ever and not doing to well against other currencies. All this has wide implications in the world arena. It is likely that the US will have to reconsider its very generous aid packages to foreign countries. Israel and Egypt are the biggest receivers of foreign aid. Together they receive somewhere in the area of 18 billion dollars in aid yearly. As the United States seems to be deep in a recession or economic slowdown there may need to be a complete reevaluation of fiscal policy. This will not only affect foreign policy but also domestic American economic policy. It may be more difficult to allocate funds for extra spending with money that will not be there.

In the long term most analysts agree that the resiliency of the American Economy will come to bear. This means that the market and economy will do a complete turn around and start to surge. The problem is no one knows when that might happen.

Hey money makes the world go around.