Safety

One of the things that that is a primary concern of everybody is the desire to be safe. This is a fundamental need but can anyone really know if they are safe? So all anyone can really pursue is the idea of safety. By this I mean if the financial analysts tell you you need $1 mil to have a reasonably secure retirement, that becomes a measure of future safety.
Of course to achieve a significant amount you have to trade current safety for future safety. So, instead of putting any excess money you may have into Government bonds you invest is the stock market. Why? Well everyone knows that over time the stock market goes up by 10% a year. This was based on long term trends and became gospel. Of course the other alternative was to buy real estate. Why? Nobody could lose money in real estate. Further, since the economic future would be better than the present, use credit cards and equity loans to live the good life today. Why shouldn't you enjoy life and you would pay everything off someday. In fact, lease a luxury automobile at a monthly cost much less than you would have to pay if you bought it. Of course at the end of the lease you would own nothing, but just leae a new one.
This behavior all seemed safe to most people fairly recently, and as long as that view of safety persisted, it was somewhat self-fulfilling. The consumer driven economy was being driven by, well consumers in debt. Banks were making loans, wall street was repackaging those loans and providing more capital to the banks. Of course, its called a bubble, but really its more like a bigh ponzi scheme, as long as more money comes from somewhere, it can continue.
We all know it didn't continue and the exact point at which the bubble burst and the causes are probably a matter for the historians to sort out. So equity disappeared, housing collapsed, banks ran out of money and jobs started to vanish. Have we reached the bottom? Funamentally, this is a rich country with significant resources, a reasonably well educated population and a technologically advantage over much of the world. We will buy cars again, we will take out loans and we will buy houses. Prices needed to stabilize and the level of activity in those areas will probably slow for a significant period as people shift to greater safety. One of the problems with our current economy according to many experts is that Americans are starting to save too much.
Well, safety is what we all want after all, keep saving.