After last week’s 512 point loss on Thursday, it was able to gain back 70 points on Friday. Standard and Poors released a report Friday night as to downgrading the United States credit rating from it’s traditional “AAA” rating down to “AA” rating with a negative outlook. S&P stated that they feel that the politicians in Washington DC have shown their incompetence towards working together and saving the deficit from getting worse. Over the weekend, S&P’s remarks about if the federal government doesn’t get a grip on it’s fiscal irresponsibility, they (S&P) may feel to lower the credit rating again within the next two years.
After all the weekend news and the lack of President Obama coming out to speak about the report, Wall Street and investors alike realize that the economy recovery that Obama has been talking about for the last two years is nothing but a charade. The DOW took an even bigger plunge today falling 632 points after it was all said and done. The DOW closed at 10,809, down 5.55% just for today’s trading period. Since July 21, just two weeks ago, the DOW has lost nearly 16%. A drop like this hasn’t been seen since the recession started almost three years ago. NASDAQ has lost over 6% just today alone and the S&P 500 shaved off 6.66%.
I’ve been talking about this day coming for almost a year. Yes there have been some great moves in the stock markets over that time, but unless you took all your money out of the markets two weeks ago, you lost all that was made during that time. There are many that think that they’re not involved in the stock market, but as they will find out soon enough, what happened on Wall Street these past two weeks has caused many people a major portion of their retirement fund and/or their pension. trillions of dollars of wealth have been lost in just a short period of time and with the actions of our politicians, who really knows how long this crap is going to go on. Japan went through the same thing almost twenty years ago and they’re just coming out of it now. The sad part about that is the fact that Japan is small when compared to the value and size of the United States of America.
We will have people, many of them part of the baby-boomer generation wanting to retire and not being able to cause to the damage to their retirement accounts. they will (in many cases) have to continue working a few more years to make up for the losses they’ve been dealt in these past few years. In turn it will make it harder for the younger generation to find employment, especially since the economy is so bad, that it will keep the unemployment rate somewhat in the same range it’s been in since Obama has been in office.
For those of you that are wondering what to do, if you’re young, keep doing what you’ve been doing as to putting money into your 401K and retirement funds. If you are within retirement age (15 yrs or less), I wish I had all the answers. Each person’s life is different and their needs during the later years differs from one to another. For the next two years (at least) I recommend buying into commodities. The U.S. dollar is going to continue to lose value as the Federal Reserve tries to save the economy with another round of quantitative easing (QE3). Gold and silver are the best hedge when face with these types of economic woes.