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In early 2008, the US and other global stock (equity) markets were literally 'freaking out' over corporate prospects for the future. It appeared as if the 'sub-prime mortgage crisis' had created a huge sink hole right in the middle of the US taking many companies (Lehman & Bear Sterns) and other countries and their banks along with it as the monstrous hole pulled a significant amount of the global economic activity along with it into blackness.

It appears difficult for many people to remember that not only the US government, but also most other capitalist governments around the globe began taking action to 'step in' and support the economy. Like it or not, this is what governments do in a time of financial crisis.

In the US, an $8,000 housing credit became available for new home buyers, the 'cash for caulkers' bill was passed, unemployment benefits were extended beyond 'regular' time periods and specific tax credits were provided.

Over here in Japan, cash benefits were handed out, government subsidies were provided to buyers of eco-friendly cars and deep discounts were provided to those who wished to travel somewhere domestically on Sunday's.

There are many individuals and economists who criticize the government for taking the steps it has, such as those above, as they theorize that the government should let many 'troubled' companies and banks fail which would allow 'the system' to be cleaned out. And technically speaking, they are correct. However, this theory doesn't account for the softer qualitative cultural side of society. The problem with this 'theory' is that as financially troubled companies fail and lay off their staff, society collapses and the unemployment rate SOARS. Not just a little, but 'a------lot'. Had governments around the globe not stepped in and offered support to the economy through lower interest rates and the nationalization of some firms, ie. GM- AIG- Citi, we would likely be staring 20%-40% 'official' unemployment if not more in the face.

At this time, its also important to remember that during the great depression, the US was a country with a society which 'generally' helped its neighbor. In today's society, people generally don't trust someone they don't know and we all seem to have that 'look over our shoulder' mentality as we walk down the main strip of any major city, especially in the evening-night. (You know what I'm talking about don't you)

Today's society would tear it self apart socially if unemployment were allowed to get 'officially' that high. Crime would be rampant as ordinarily 'good citizens' turned into thieves. It would literally be a 'run for the hills and save yourself' environment.

So rather than let that happen, The US government (and others) decided to try and inflate their way out of this downturn through lower interest rates and stimulus spending. This of course does not cure the illness, but it does wrap it, give it medicine and allow it time to heal. Sure, it may take a little time for the economy to get back in the full swing of things, but its likely a lot better than the 'shock' therapy suggested by those with healthy bank accounts who would likely be able to weather such a such a severe downturn better than the rest of us 'regular folk'.

At this point in time, the stimulus package and its effects are beginning to wear off. GDP is in decline and the public sector is not adding jobs at a pace quick enough to create a 'real and sustained' recovery. The US and other global stock (equity) markets have clearly responded favorably to recent government interventions. However, from now on, the dosage of medicine administered by the governments of major economies will decrease and the public sector (which makes up roughly 2/3 of major economies) will need to begin functioning increasingly on its own. And the big question is, will we be able to handle it??

We at NP Fisher believe it'll be rough going from here on out and that now is 'NOT', in fact, the time to be investing in most stock (equity) markets either in the US or around the world. We are currently advising most of our clients not to invest in stocks (equities), but rather to save and build up cash positions so that when the next opportunity does arise, our clients will be perfectly positioned to buy specific stocks (equities) at 'discount' prices.

Why not join us at NP Fisher to find out how we can help you position yourself to be 'invested at the right time and in the right place'.

NP at npfisher.com

Not only will US stock markets fall from their current levels from now until 2011, but other major stock markets will fall in step with the American equity markets and we'll enter into a double dip recession 'phase' which will create incredible opportunities for some.....would you not like to be one of those 'some'?

Join us at NPFisher, and we'll help you understand what's 'likely' to come next in global equity markets. We'll also help you position yourself properly so that you'll benefit financially from upward economic movements when they eventually do occur.

NP at npfisher.com