good evening on a busy news day around the world, thousands of police on the streets of london and other uk cities are getting the upper hand on the fourth night of the scene. wild gyrations ending with the dow up, that's right. up nearly 4%. what it means for your money is legal ger, personal finance expert juan ulreich. a crazy day in the market. heading for another day of the dow falling. the rally in the end end up 400 points plus up. what do you make of it all? >> the fans shl markets were trying to figure out what the fed said. to distill it down, the financial markets figured out that ben bernanke with a bit of resistance was going to stand by the statement that the g-7 said and that was to do anything it could to shore up the economy and provide liquidity on the face of what happened in the last weeks. the economy is weaker than what they thought it was. the debt ceiling crisis dealt a blow. and the downgrade to the s&p. >> all of that with the u.s. economy almost stalled out. the fed said we're not going to let that happen. the financial markets at the end of the day once they read through it all, believed it. >> you had me curious. watching the whole thing unfold, the immediate reaction is negative. you're saying they waited to grasp what ben bernanke was saying and realized it may not be bad news. i think there was a bit of a shock of how much the fed acknowledged that the economy was weak by saying in an unprecedented statement that they would keep interest rates at their zero target on the fed funds rate until mid 2013. they put a date on it. that's not done by the federal reserve. there were some members who dissented on that. we're all a little fatigued by the dissent and the debate in washington. some people weren't sure, does this mean more indecision. but frankly ben bernanke has a good record of corralling the cats within their own corral. even when they're mountain lions. he gets them to go where he wants them to go. that's important. we could do things with the balance sheet. we're not out of bullets yet. when all was said and done and they digested the massive amount of news, they said maybe we won't have a recession now. the bad news is we'll sputter along and also the good news. >> do you agree with this? are we now avoiding the double dip recession? has the fed run to the rescue? ben bernanke, the hero of the hour? >> as interesting is what bernanke said today is what he didn't say is that the fed was widely expected or hoped by the portion of the market that he would do another round of bond buying or intervention. that's sort of the salvation from above that the market was hoping for. that didn't happen. on the other hand, the fed came out as diane said, a clear same, for the first time, put a target date on how long it will keep interest rates, the target rate towards zero. that led to a kind of collective sigh of relief. we know we can expect interest rates for the foreseeable future. the fact that the fed didn't do the massive intervention maybe led people to think, okay, maybe it's no it that bad. that's sort of the last thing that it could have done. and wages have to be falling really fast and prices have to be falling significantly for the fed to go and do that again. it didn't, maybe things could be worse. the market took that as a sigh of relief. >> where are we in reality? where are we? >> for those who are saying be calm, carry on through all of this, feel a little bit of i told you so today. here's the thing. markets do what markets do, which is go up and down. for regular american consumers, for folks who invest in 401(k)s, this is not the time to panic. but there's a real crisis of confidence here. the american consumer is not where they should be or where they want to be right now. and they've taken all of this mess really to heart and they're saying we are not confident this economy is going to get better any time soon. that's dangerous. consumer spending is 70% of the american economy and consumer confidence and consumer spending do a dance together. hen one dips, the other goes down, and that's what's going to happen. that means less growth in the economy. corporations are not going to be hiring. that means that job numbers are not going to improve. until job numbers improve, the american people are not going to feel better and feel confident in this economy? >> where should the average american put their money now. starring with you. where should an american put their money right now? >> i'm not an advisor, an investment advisor. i bet long on the u.s. economy and u.s. equities, so i'm long in the stock market. we're seeing the opportunities in the stock market to do a double dip. when they dip, they do allow us to double down. >> that wasn't ten words. >> which kinds of stock? you've used way past your limit but what kind of stocks quickly? >> i'm bullish on exports and multinationals, manufacturers and that sector. >> can we try the ten-word rule with you? >> i'm an editor. it might work. this is already seven. if you pull out, you have to pull it out right and you have to be right when you put your money back in. equities are still a long-term thing. you have to think for the long term though, you have to. >> i would be tempted to shove it in a bag under my mattress at the moment. are you heading that way? is gold an option? are you still sticking to treasury bonds? where are you going? >> folks start talking about mattresses, it's a bargain sale going on and you should buy more. consider time frame, know where your money is, and calm your stomach. >> you did that in ten words. >> i'm a former editor too. >> barney frank says that it's time for president obama to face up to liberals in budget cuts. what did you make of a fed statement today? >> it's appropriate. mr. bernanke and his colleagues are doing the right thing to the extent they can offset the opportunities. it's interesting that ben bernanke, a george push appointee originally warned congress not to do too much cutting in the short term. he said we've got a longer term deficit problems. he said in the short term, the cuts you're talking about are head winds against the economy. he's doing everything he can. but we need to do now something on the fiscal front. it's now overwhelming, borrow from your country's history. the late 40s, prime minutester, he called harry truman and said, look, i'm facing a terrible economic crisis postwar. i cannot continue the inter international efforts to maintain the british remnants of empire. if you want to do it, fine. the time has come to recognize the crisis, withdraw from iraq, afghanistan, tell our good friends in europe that the cold war is long since over. they're well able to defend themselves. it's time to substantially reduce the worldwide military commitment, put some of that to deficit reduction. but save some immediately. to help save local governments to get some of the employment they lost. the notion that they've come in the situation, and the same time the president talked about taying in iraq longer than bush wanted, it appalls me. the time has come. people say, you have to get real. you have to understand the cop strains. we can cut $200 billion a year on the military expenditures that go not for our own security but for our worldwide policemen. the wealthy allies spent far less as a percentage of that product that we do on the military. the time has come for us to recognize that we can't afford to do that and we'll suffer no loss in security. an interesting point is the trouble being the world's policemen as america has been for the 50, 60 years, it's a lonely place and you end up as america found itself now getting hardly any credit from anybody. if the expenditure you're laying out is so fast, there's a good argument to say, you know what? as the chinese do, for example, look out for number one here and bring it all back to america. >> south korea needs help against that nuclear-armed lunatic. israel is in a difficult situation they never asked us for troops. western europe -- when harry truman went to western europe, the countries there were poor, they were devastated by world war ii, they faced stalin. the was a good thing to go in. but we're still protecting western europe from i don't know what and they are well able to do it themselves. we're building -- i guess because of cold war hangovers a missile defense system in poland and in the czech republic nobody needs. as you said, you wind up worse off politically. i'm not talking about america being anything less than the strongest nation in the world. pu the world doesn't need a policeman as much as we do. it's a hard thing to do. begin with iraq and afghanistan. we accomplished whatever purpose we could have had with osama bin laden. we never should have been in iraq. the pentagon budget is $700 billion a year. medicare, which people want to blame unfairly for the crisis costs $580 billion a year. we can with no loss in our own security scale back. you can say on one hand america has to recognize constraints and act as if it's still 1960 and we can spend whatever we want when ever we want all over the world. >> the devil's advocate position is if you look at afghanistan, the reason they were able to ferment the situation there is because no one was there keeping an eye on it. the counterargument is there are lots of places in the world that were unstable where if america reduced any presence, you could see that situation recurring. that would provide a -- an attack to the homeland security in the homeland. >> if we shut down afghanistan, they're in yemen. if you shut down yemen, they're in somalia or sudan. we can't plug every rat hole in the world. we did a significant amount against al qaeda. a major battle now is with the taliban. george bush became president. the taliban was running afghanistan. they were destroying buddhist statues, mistreating people. they were outrageous. but america can't solve every wrong in the world. if we did, we would shoot mugabi, a terrible abuser of people and others. in terms of national security, we dealt with oh sama, if you look at the $120 billion we're spending in afghanistan, plus the billions i think we're wasting and the pakistanis who are playing a great double game, small percentage of that back home would make us more secure than what's happening in afghanistan. >> congressman frank, thank you very much. >> thank you, piers. the world gyrations are a problem, not just in this country but around the world. joining me now is james fouler. he surprised me. he said china may be on america's side in all of this. interesting position you're taking. if you listen to donald trump, he foams at the mouth at the mere mention of china. he believes they're an enemy to the national interest. why do you believe he may be a friend? >> the media crisis, the financial crisis going on now despite all of the bombasts coming from the chinese side how america needs to pull up the socks and behave better, fundamentally, their interests are the same as ours at the moment. the two big threats to the chinese economy are number one, they won't be able to sell things to a largely american market. so the recession would hurt them. second, the extensive holdings in the u.s. treasuries and u.s. dollars will be at risk. so for the time being, the interests are avoiding recession and having a calm return to u.s., u.s. economy and financial markets. >> secretary geithner spoke to vice premier wang today. how do you think it sfwhent. >> the editorials in the state papers for the last couple of days have been strong on the finger pointing at the u.s. for all of its bad behavior. we imagine the two financiers got past that. the main concern on the chinese side would be what the u.s. was planning to do. what weapons were still in the financial arsenal to calm things down. in the u.s. and world markets and avoid the onset of a recession. the thing that the chinese fear the most is the same thing the obama administration and most americans fear is a plunge back to greater unemployment and slowing economic activity. that's the threat to them as well. >> is it healthy or unhealthy that china holds so much of the american debt right now. >> it's a compared to what question. it's fundamentally for both economies and they're distorted with one another to the degree they have been. especially the last ten. china has depended on the u.s. market to provide demand for their own factories, all of the peasants going to the cities and having manufacturing jobs. at the same way the americans have pretended having the low-cost goods from the suppliers. the chinese surplus lent here to keep our tax rates down and keep our mortgage rates down. in the long run, it's not wholesome for either country and going to be uncomfortable on the process. less reliance on borrowing, less reloins on overexporting there. >> i worked in america and china. it seems to me the fundamental business practice difference is bureaucracy. things in china get done quickly without the mown tape of red tape. everything in america seems consumed. is it time for america incorporated to revisit this whole area, do you think? >> aspects of china's performance is more or less impressive while you're there. the beijing olympics or the high speed rail project that's a double edge situation that the chinese can get done with great speed. the recent tragedies in the high-speed rail projects, the fatal crash and the evidence of corruption suggests that the chinese approach has its problems too. there's a huge overhang of the white elephant projects that kept the demand going up in a short run. but you go to the remote cities, there are giant airports, giant shopping malls and everything. it can be romanticized from the -- out of our frustration with the bureaucracies in the u.s. >> thank you very much. >> my pleasure, thank you. >> london calling 16,000 police on the streets. can they restore order? the eagle flies at dawn. the monkey eats custard. price-line ne-go-ti-a-tor. so, you've been double crossed by other travel sites and now you want to try the real deal. yes, is it true that name your own price... ...got even easier? 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