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Originally Posted by jcb986
Now this is an assumption on my part, but maybe this is why your investors are not investing. I am 65 and I am retiring in January 2011. I lost about $75K in the bubble burst so I am not investing in any risky stocks and I want to preserve my basic capital left so I can use it during my retirement years. There are many more like me because we are the War babies and we have entered into our retirement days. Now as for the others go, I think they over extended and cannot help in the short term, but we baby Boomers invested for more than 30 years...so it my take a long time to rebuild the economy.
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by not investing, though, i'm guessing you at least have your money in a bank. this allows it to be loaned out to others & it still works in the economy.
you raise a great point, though: after having been burned recently in the markets, a lot of people are very hesitant to jump back in that water. bernanke has a solution for that: quantitative easing, you will notice, has driven the returns on your savings accounts & money market accounts to virtually zero. his policies have ensured that conservative-minded investors cannot make money in low risk investments. in fact, he has ensured that you will LOSE money to inflation. he is trying to force people into risky assets because, to him, for some reason, the market = the economy.....
most of us of course know that this is BS; the market is NOT the economy, and the fact that the market is doing quite well while the economy is by most measures NOT doing well.