I can honestly say I do not know what is going to happen to the economy for the short term, but one thing I know is that we are going to see inflation like we have never seen before. Deficit spending in the past has always resulted in inflation. Reagan's buildup of the military (I really liked the man, but have to be honest about what his policies brought us.) gave us a big run up in the deficit. The result was inflation. In 1986 the inflation rate was 1.9%. In 87 it was a high 3.7% In 88 it was 4.1% In 89 it was 4.8 % In 90, almost two years after Reagan left office, inflation was up to 5.4% We have just had eight years of horrific deficit spending and now we are adding to it in amazing fashion. (I will not argue as to whether it is necessary or not as I simply do not know. Does anybody for certain?) What I do know is that we will see double digit inflation that more than likely will outpace anything we have ever seen. You do not want to be holding cash when that happens. Somehow, cash does not keep up with inflation. ;^) What to do about that? Hummmmmmm? Put your money into an investment that will keep up with inflation. Stocks, Real Estate, maybe even gold, though I feel it is already too highly valued and might crash. What stocks? Right now, I'd go with the S&P 500 stocks as there is little chance that they will go under like the small cap stocks are. (About two a day.) To each his own. I expect to see a run on S&P 500 Stocks in the coming weeks (More than likely in mutual funds that trade the S&P 500. They might go up ten percent or more as there are some indications that the economy is gradually turning around. That One Percent increase in retail sales last week just might be the first solid indicator that the tide is turning in this country. When people make a run on the S&P 500, don't be left standing on the sidelines. Wait a week and you will have missed the boat. Real estate? The turn around there will not be as sudden. The S&P 500 stocks could go up 40% before Real Estate goes up three percent. If you miss the S&P runup, there is always the small cap market and Real Estate. Me, I am going to slowly average into the S&P and see what happens.