There's currently a worldwide run on the banking system. Nowadays, bank runs can occur in seconds: Companies and wealthy people in the know are pressing buttons and transferring billions in cash out of shaky financial institutions. With leverage of 30 or 40 times their cash balances, banks are collapsing around the globe while the average American is kept in the dark by the all-powerful lords of finance.

Governments worldwide are desperately trying to stem the tide of defaults; Ben Bernanke and Hank Paulson are scrambling to provide enough liquidity to keep the system from imploding. A coordinated reduction in interest rates worldwide will soon occur as a last-ditch effort.

For the first time in many years, I saw something that shows promise for our country’s future: The American public was firmly against this bailout bill. I sense that the “Me Generation” is finally ready to accept the consequences of their selfishness, and the materialistic frenzy that's been the hallmark of the past 30 years is coming to an end.

It's being forced upon many, but will be the choice of many more. The worldwide deleveraging will lead to a new mantra of frugality and living within your means. People will turn inward and seek comfort in more simple pursuits. While this will ultimately be beneficial, the immediate effects will be wrenching.

The irony of our current economic system is this: If everyone lives within their means, the economy will collapse. Spending money we don't have is what's driven our country for the last 3 decades. But if banks won't lend, credit card companies won't offer credit, and auto makers stop financing cars, consumers will have no choice but to downsize. The government, by contrast, will continue (and likely accelerate) deficit spending.

By the time this crisis is finished, we're likely to be left with 5,000 banks or less (there are now 8,500). The official unemployment rate will easily surpass 7%, possibly reaching 8% by 2010. Based on the unemployment calculation used during the Great Depression, we already have unemployment of 15%. This could conceivably reach 20%. Market P/E is still above 20. Profits will plunge in 2009 and irrational pessimism could propel the Dow to its 2002 low of 7,200. That would be 28% below today’s levels and almost 50% below the all-time high of 14,000.

Even if we somehow avoid a true depression, the next few years will be extremely painful. The question is whether we come out stronger on the other side, or as a nation in decline.

The words of Congressman Ron Paul should be our rallying cry:

“The issue boils down to this: Do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are being looted in order to subsidize the fattest of cats on Wall Street and in government? ...When the chips are down, will we stand up and fight? Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.”

It's time for our citizens to accept the bitter medicine of bad times, learn from our mistakes, and put this great nation back on course.