The Financial Panic Begins

Asia markets off, Europe markets shaky, but nobody can nail down a solid reason why. The formula is too complex and the best experts on the United States economy crisis are just standing back for a few days to see what starts to grow.

What is actually going on is panic and sheep mentality with the desire to error on the safe side. Generally speaking this is tied to the human survival instinct, and no matter what anyone says, or what logic seems to dictate, people will act on what their gut feeling tells them to do. If they have not a clue how to figure it out as this is way over the heads of many, they may just follow others who also don’t know off a cliff.

As for some of that logic for the moment being the short term, things will get better. With all that money the United States government taxpayers just injected into the system to cut out all that bad debt, things can only go up. Only if there is new debt that exceeds the money that was injected will the same problem reappear. You can even perform this simple scientific experiment in you sink at home with a glass and water, it is that simple of a concept.

What is unknown is there are so many little things that effect the economy. One alone means little, but collectively triggering a domino effect is what the experts are looking for. Once they start to see dominos falling they will look to break the chain and stop it.

People that are looking at this as a cancer patient who just underwent surgery to remove billions of dollars of bad debt, may think that the trauma may be too great as too much was removed. That is a fair analogy but still the doctors need to wait and see what happens while the patient is in the recovery room. They can’t fix anything until they can see what is still wrong.

The bottom line is do what you feel is best. Having cash on hand just in case is a no brainer. Cash being the literal form of cash as in the stuff you put in your wallet. Have enough to survive a few weeks to a month if you can afford it. With that money on hand the panic trigger will be less severe and tend to stabilize the economy by avoiding huge runs on the banks as people empty their accounts.

It will take a few weeks or so for the debt to be bought up, and while that is going on people will still panic because they are not seeing the immediate fix. It only took President George Bush a few seconds to sign his name bringing the new law to life. It will take a few weeks before the effects will be seen. Be patient and look to avoid the sheep mentality as run on the bank can cause more harm that good.

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