The dour economic news today is beyond sobering-- it is down right frightening and terrifying the entire Western World!
Highly educated young people in America have an employment rate of 53%-- that means their unemployment rate is 47%-- the highest since the end of World War II.
It really is "The ECONOMY" stupid as Clinton advisor James Carville famously said.
Only this time the US Economy is so intertwined with the Global Economy that there are no simple answers to return to prosperity.
In this time of uncertainty, Western countries are all looking for an easy answer to return to growth-- there are none.
For example, winding down the two wars in Iraq and Afghanistan that the West is fighting seems like a logical place to start.
However, what we may fail to appreciate is that both of these wars - although costly from an economic and human life perspective at this point - are actually a stimulus to the US economy.
The military industrial complex has been the engine that drove the US out of economic decline in the past.
It is currently operating at top speed -employing millions- and has failed to make even a dent in this overwhelming problem.
Objectives aside, consider what the unemployment numbers or GPD might look like if both these wars were to end suddenly during the existing unemployment crisis - all the military and independent contractors showing up on the job search lines all at once!
This is not a call to continue the wars without a clear objective but it is a reality check as to just where the US economy is at this very precarious moment.
The news is not good - the Dow dropped another 400 points, the Federal Reserve just began "operation twist" in a last ditch effort to reduce long term rates and spur growth - no one believes that Congress, which has its lowest ratings ever, will be able to reach an effective solution to address this problem.
So it seems clear that investors pulled out of the market due to long term fear and uncertainty of what is next.
The only sensible answer may be to stuff your cash into your mattress and hope the bed bugs don't bite...And don't forget the cannolis.
This blog can also be read on Sky News.
Follow Jon-Christopher Bua on Twitter: www.twitter.com/JCBua