Investing is still tricky in the US. This is a fact where the economists haven’t marked out the true state of the US economic crisis.
Uncertainties in the investors are apparent before the volatile market of the US. Stocks values are unpredictable that sell out of risky assets are likely to happen.
The erratic and unexpected movement in the stock price index proves to be difficult for the local and foreign investors to finance large sums of investments in the US soil.
As bailouts of major financial institutions and strategic companies are ongoing, the concentration of the dollar in the US left its offshore lines needing for money resuscitation and thus, is at peril to close down. This will result to the shrinking of the US markets in the world and less revenue to the mother companies that US multinational companies will be struggling for funds to finance their operations inside and outside the country.
More and more US companies will be needing bailouts from the US government, and the more money needed to bailouts these companies the more the US economy would be relying on foreign debts. This in turn will depreciate the value of the dollars. Depreciation of the dollars has a direct effect on the value of the stocks and assets of the US companies.
These are the reason why the investors are hesitant to spend their money nowadays. They are afraid that they will have losing investments or worse their money will not return.
The US government should promote investments by the local and foreign investors by providing safety nets and guarantees. But as long as the economic turmoil is not yet controlled, the US government will find hard time in encouraging them.