Trying to figure out the financial crisis and what will happen next

What I'm understanding, from Dad29, Megan McArdle, and lots of other reading, is that we need immediate action from the government because the short term credit market was/is *this close* to being frozen. If that happens, businesses across the country will collapse, as they won't be able to get the short term loans they need to keep the doors open every day.

If that happens, we'll be plunged into an instant Depression. As Dad29 says, forget about getting a paycheck. Am I right in my understanding so far? [Asks question of blogosphere hoping one or two people will happen to stop by to reply...]

I'm trying to get a crash course in economics here. Gallows humor intended.

What I'd really like to know is: Should we grab our 401K's, take the tax penalty, and buy precious metals? Or canned goods? Or just stick the money in a shoe box?

Just kidding. Sort of.