This is just pure speculation at this point. But here's the thing. The American stock market, the powerhouse of the economic world, is in a protracted meltdown. The only thing keeping it from looking like a replay of 1939 are the automatic stop gap measures put in place that limit how much stock can be sold in a single day. And since every country in the world had investments backed by mortgages, stock certificates that had no value to back them, investments with no collateral, it is a world wide problem. So now, what do you do with your money?

 

Do you go to your bank and withdraw every dime in cash? Well, what you would be left with is a bunch of paper dollars, which may or may not be worth something in a week. See Argentina financial crisis.

 

Put your money in stocks? Well, as I've long said, and now the media is beginning to catch up with, the stock market is no different than gambling at a riverboat casino. And right now, everybody is selling everything, so the value of every stock continues to decrease.

 

Put your money in gold? Well, gold is a comodity with intrinsic value, true. However, if John Q. public invests in gold, unless it's gold coins, what they receive is a gold certificate, not actual gold. Just another piece of paper.

 

Put your money in insurance? Well, the first signs of the current financial meltdown were seen in the insurance market, where two years ago, companies who greedly backed subprime mortgage lenders, began to fold because they could not meet the obligations when the housing market began its collapse, right up to the insurance giant, AIG, who may or may not get a 7 billion dollar bail out in order to stave off that world wide financial meltdown.

 

Put it in oil? Well, you've got the same problem there as you do with gold. All you get is a certificate. A piece of paper. Not an oil tanker parked in your back yard.

 

Just leave your money in the regular bank account? True, it is backed to a percentage by the FDIC. But if the government has no money because the real subprime crisis is in the fed's finances who were using multiple sets of books to hide the draining of their economic system to pay for the Iraq war, no child left behind, and a plethera of other failed endeavors, then the FDIC won't have anything of value to give to the customers of those banks.

 

Yes, it seems vindicating to stand around and point fingers at this person or that group and say it was their fault. But the cold, hard reality is that if they fall, we all fall. So where is a safe place to put your money? At this point, there isn't any. All the markets, all the vehicles in the world are tied into this 'new system' that passes paper as having intrinsic value with nothing to back it. And when the world markets say that paper has no value, all you're left with is a pile to burn, and it won't be a very long fire.

 

The lessons learned in 1939 - 1941, when regulations were put in place to stop the very thing that is happening now, have been forgotten. The devistation to our nation that took us 3 years and a world war to finally correct, has passed from our memories. Those who say that the markets will correct themselves, do not look at the financial ruin of the average person that is caused in those corrections, or how long it takes to recover after a sudden, major retraction in those markets.

 

So what can the average person do? Not much except hold on tight, because it's going to be a bumpy ride.