As everyone no doubt knows right now we are having a few financial difficulties in this country. It started with higher energy prices and a plunging dollar. Depending on your economic views neither of these issues were a big problem.
Now we are being hit over the head with the current banking crises and it's a huge deal. The stock exchange has been plunging and it's hard to blame anyone who is close to retirement selling much of their stock right now which will lead to the market going down further.
The real issue right now is bank liquidity. Banks are strapped for cash right now and borrowing is becoming difficult. If Banks overcorrect and make lending too difficult it will make it harder for business to expand. If business does not expand it falls behind and people are laid off and costs are cut. If business cannot expand new opportunities for constructions and other services becomes limited.
In short the economy stops growing and we end up in a recession.
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