Quote:
Originally Posted by Pico and ME
This is why I am fretting about my simple savings account. Everyone I talk to tells me not to worry, its protected by the FDIC,
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If government runs out of cash (and cannot borrow more from foreigners), then it will print money. You will have that money whether in a bank or under a mattress. And if the government prints money, your cash depletes in value equally whether in a bank or under a mattress.
Worry not about your bank. Worry more (or prosper) about what happens when the markets finally find a new value for America. This market crash (and the resulting upturn) is about discovering what America was really worth. The American economy was clearly overvalued due to so much bad equities. This market crash is finance markets desperately seeking our actual net worth AND for economic forces to take revenge for the money games.
In the short term, this is a stunning opportunity for people like me who never get out of markets, but saw this coming, and got out completely many months ago. For others who stayed put, expect to lose at least 20% because the American economy (like housing prices) was probably at least 20% overvalued.
Typically, markets overshoot in the downturn, and then rise up to what is a corrected market value. Obviously, everyone with cash is waiting for this market to find that bottom (at least a 35% downturn), then ride the wave back up to a new and lower American economy value (probably something below 20%).
When will it end? We don’t know. Too many shady institutions have not yet been punished by economic forces. One such possibility is hedge funds who I suspect are currently getting corrected which would explain the latest multi-hundred point market drop.
Worry not about your bank account. Worry more about how this economy, your job, and your government services may/must change now that America is revalued.