The Dow Jones Industrial Average (DJIA often referred to simply as The Dow) is loosely a kind of measure of how well the country is doing financially.

At least that's what most people think. It's really one of the measures along with the NASDAQ and the S & P 500 (500 largest companies). None of them are ACTUALLY good indicators of how well the country is doing!

It can all sound very confusing, but for this discussion, let's ASSUME the Dow Jones IS indeed a measure of the "wealth" in the U.S.A. If you don't follow these things on a daily basis, that's not a problem, because I think you'll still get a greater understanding of what's going on in our economy (of which you are part) and it will help you in the near future by giving you the opportunity to prepare yourself.

Try this:

Open another tab in your browser and go to msn.com (or any other source to view a long-term view of the Dow Jones Industrial Average).

Scroll down and on the right click the word 'Dow' above NASDAQ and S&P.

On the right there is a graph called '$INDU Intraday Chart'; at the bottom are some figures like this:

5d 1m 3m 1y 5yr 10y; these simply stand for 5 day, 1 month, 3 month, 1 year, 5 years and 10 years

Click the 10y link.

Finally, at the top of this new graph, next to the 10y tab, will be a tab called 'Max'. Click that.

Now you can see what is actually a complete graph showing the DOW JONES index since just before the GREAT DEPRESSION in 1929. See what happened from about 1985? Where did all this great "wealth" come from? Where did it all go?

So, the Dow has "lost" over 7,000 "points" in 6 months from mid 2008 to early 2009. It can still go down a LOT further. Why? BECAUSE IT WAS NEVER THERE IN THE FIRST PLACE! "What?". Look at the graph again.

NOTHING REALLY HAPPENED to make the economy boom in the late 1980's. No fantastical new inventions; no sudden super-strong work-ethic gripped the nation; no new mega-deposits of minerals were found in the U.S. in effect NOTHING happened; nothing REAL anyway.

As you can also see on the graph, Black Monday in 1987 was a mere BLIP compared to what's happening in 2008/2009.

So, back to our main DOW graph. If you draw a line on the graph from 1945 (end of the second world war) to 1985 and then continue the line straight-on to present day, what level does the line cross? Around about 2,000. WHAT???

Yep, around 2,000 points. Is that scary or what? Well, yes and no.

It COULD go down to around this figure, which would be the figure that the economy SHOULD have grown to, had the expert managers of the country over the past 25 years been a little more "expert" than they were.

Yes, because many more companies will go bust and pensions will be worth a lot less than the owners thought they were worth in mid 2008.

No, because of the following: the DIGITS in your bank account (or pension account) and the pieces of paper in your wallet (or under the mattress) are just that................pieces of paper or electrons whizzing around a computer.

This means that EVERYTHING ELSE is just the same as it was BEFORE the stock-market crash. There are the same amount of people (give or take), the same amount of ability, the same amount of raw materials, the same amount of EVERYTHING.

The ONLY thing that has changed is the MAKE BELIEVE stuff; that is, the management system that was being used to control these things.

This isn't a case of deciding whether or not the system that governs the money flow SHOULD change, it's INEVITABLE that it WILL change, because it's completely out of control. This has happened before, and it will happen again. All that we are seeing now is a HUGE market adjustment. It's adjusting to what it SHOULD be at.

However, just because the system will change, doesn't necessarily mean it will change for the better. But change, it will.

While things are going to get a LOT uglier out there over the coming years, understand that you CAN do things to protect yourself and your loved ones.

It's a matter of adapting. This has been the way of the world since it all began.

You'll have to learn new skills and be prepared to get into a habit of ongoing learning. The world is changing and to survive, and indeed prosper, you will have to change with it. So keep reading, learn NEW SKILLS and keep on keeping-on.

The only time you will fail is when you quit. NEVER QUIT!