Obama has been dealt a very difficult hand, and it will be very hard for him or anyone to turn this country's direction around. I sense that he is a good man, and he does have a great financial advisor in Paul Volker.
The entire world is in serious financial trouble, and governments are finding it difficult to stop the decay. Most of them do not understand economics, if they did, we wouldn't be in this mess.
Businesses are failing everywhere, because many consumers are tapped out, and those that aren't are being cautious. When people don't spend businesses fail, when businesses fail they lay off workers, which causes people to be even more cautious in spending. That is a financial downward spiral, known as depression.
You already know that I've been telling everyone to buy gold, and even that got slammed in the past year. That particular process will soon be over, since as people loose faith in all currencies, the only thing that will shine is precious metals. Currently the Comex, the market where people are able to buy and sell gold is being dominated by the shorts. The reason they have been able to do so for now, is that the buyers are mostly speculators, who have no intention, or the money for that matter to take delivery. The overhead supply enables the shorts to steal their lunch. As more and more people with the means seek the safety of Gold that supply will soon dissipate, and you will see gold start to rise. Silver too.
The dow and the S&P are falling now, and should bottom out at the lows of last November (that's a guess, not a guarantee). I suspect a desperate attempt to add liquidity will find it's way into the market and it will start to rise. Even with business conditions deteriorating, the stock market can rise, as long as their is liquidity available. This happened in the 30's as well.
We are in uncharted financial territory. The case model is the Weimar republic in Germany, where the mark declined to the point where it took billion mark notes to buy groceries. Much of the rest of the world struggled as well, but not to the same extent. This time around, all currencies are unsound, and backed by NOTHING. The only thing that makes them appear valuable is the people's trust in them, and trust is not a stable thing.
I don't have a crystal ball, and don't know what the world's leaders will try to do to stop the problem. My best guess is that the US in an attempt to hold things together will try to start a massive jobs program, spending public money on infrastructure and hopefully food production. If they can get money into people's hands, that will eventually help the housing market. But public spending of this type can by highly inflationary so each dollar you have will be worth less. And that is what will make gold very attractive. They can print money, but cannot manufacture Gold or Oil or any consumable. That takes honest work.
If I'm right about inflation, you won't have to worry about debt. Cheaper dollars will make it easy to pay off any debt you have, as long as you have work. If you have any control over your 401k, see if you can move it out of the usual sectors and into gold mining companies and food companies. If your particular plan doesn't have those options, you can make a tax-free transfer into an IRA. I like US Global Investors funds, USERX and UNWPX, and you can open an IRA account with them to transfer your funds.
Watch the financial institutions for a sign of when the bottom comes. Goldman Sachs and all the other banks got hammered today, a real nice present and a sort of FU for the new President from all the financial tools.
You can also play the downturn in the market by buying bearx. I will be buying put options, but I can't explain how I trade here, or how I read a chart. There are lots of books on the subject, but you can probably get a better education on the markets by going to a free site, stockcharts.com. You can annotate your own charts there, and there is a section where other people who do technical analysis post their charts. Some of them know what they're doing, and explain their set-ups. There is also an index of trade patterns, these patterns often show you when to buy and sell. Leavittbrothers.com is a service where they talk about chart set-ups and will even do the work for you for a fee. IMO, they are pretty good chartists, and they can make you a lot of money if you take their advice.
The most important thing at times like this is to remember what is truly important, your health and your family and friends. I wish us all luck, we're going to need it!
