The Dow Jones Industrial Average fell 519 points today. If that isn't bad enough, it's fallen over 14 percent in the last month, as investors flee to cash and gold in the wake of an ongoing debt crisis, a bleak employment outlook, a downgrading of the government's credit rating, and general fear of a declining American economy. Moreover, this is happening in markets all over the world, as economies struggle as a result of the declining American economy, as well as their own. In Asian, Australian, German, French, British, and Canadian stock markets, investors have been selling off their equities.
We can't really say that this is surprising. Here in the U.S., unemployment claims are at 9 percent (which, as we all know, is a government statistic, and doesn't include everyone who's un- or underemployed), indicating that businesses simply aren't hiring. If they're not hiring, they likely aren't producing or making enough money to hire. Hence, we hear terms like "recession", "depression", and "contraction". Whatever you want to call it, the economy is obviously not expanding, which leads investors to not want to invest in it.
The term, "confidence" has been bandied about quite a bit, lately, and nowhere does such such a term come into play with such significance than in regards to economic activity, and particularly in consumerist economies such as the United States. A lack of confidence in the economy means that businesses won't hire, because they doubt an increase in their customer base, while the guy he can't hire struggles to pay his bills, and so can't become his customer. It's a vicious downward spiral, this lack-of-confidence-in-the-economy thing. This is no doubt why politicians are forever claiming that economy is sound, and if it isn't, perpetually claiming that they can fix it.
Well, yours truly, for one, doesn't have much confidence in either the economy or the politicians, with all the economic uncertainty floating about. I certainly hope that changes soon. I could use a job.
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