Current Market Crisis in the US

    

         

predictions. The Fed maintains that amount of power. Financial markets listen to what they have to say, and follow.

As mentioned above, the economy runs on the confidence of the people. We have not had an economy based on any "hard" for about fifty years. The gold standard (our paper money based on the amount that a country has and its price) want out because there was not enough of it to back the US economy. The silver standard went for the same reason, but much later. Now, any money that you carry is worth, basically, what society has determined it is worth and nothing more. If a people has confidence that the paper they have will buy the goods they need then it will. When the individuals stop having trust in the currency, it loses its value. This seems to be a very simplistic view of how the economy runs (and it is) but its true.

The news media has a lot to do with how the economy runs also. Because we are inundated, 24/7, with financial news, the confidence pf the people can turn at the whim of one small news source. One thing is said by some financial analyst who is a little bit pessimistic. This then is magnified by the news agencies. By the time the word is circulated, the market has dropped 100 points.

               Regular people are effected by the down turn due to the loss of jobs. As people lose confidence they start putting their money in the mattress. It is held in a tight grip, because who knows when we will see another dollar. Therefore the retail store, automaker, or grocer that you would have bought x amount of goods from, can't sell what they have on their shelves. This means that they can't maintain their workforce and they have to lay off some people. This causes more

 

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