The Economy Isn’t so Bad

Ding. Ding. Ding. Wham!

The gavel comes down on another 250 point black eye for the stock market.  Somewhere a bunch of sweating guys in suits are swarming out into the sharp New York winter to drown another bleak Wall Street day in pubs and expensive restaurants.

Back when I worked for IBM, I dabbled with trading stocks just enough to see what all the fuss was about. Of course, I’m sitting here blogging for fun and profit so obviously I didn’t win big, but I did learn something interesting.

The market isn’t controlled by some giant HAL 2000 evil computer or a government appointed rich white guy. There isn’t even a mastermind midget behind a curtain pulling levers.  The market, and economy in general, are both dictated by human psychology.  Fear and Greed, as all the investing books say.  The same guys crying over their single-digit stocks, are actually the cause.

The TV tells them every day that the economy is bad, so they start spending cautiously, get jittery, and send stocks on wild rides.  The market runs on mob mentality on a very large scale.

As “bad” as things seem, we still don’t have it that bad.  Sure, there might be a few more door greeters for department stores in a few years as retirement accounts continue to whisp painfully away. I’m sure I’ll be there with them.

Maybe that’s a valid argument for investing in life experience now rather than saving for something that may or may not happen?  So far the economy hasn’t laid one cold finger on my vagabonding memories from the last three years.

Consider Zimbabwe for example.  Once sort of wealthy compared to its neighbors, now it claims the highest inflation rate in the world. How bad? Ludicrously bad. 2,000,000% to be exact – no that’s not a typo!

At one time their dollar was also worth more than a US dollar.

One US dollar right now is equal to about 1,000,000,000 (that’s a billion) Zimbabwe dollars.  They even have 100,000,000,000 dollar notes! It sounds like a quote from a Spongebob cartoon but its true.

Coincidentally, that one billion dollar note only buys you three eggs. A bottle of cooking oil back in the summer costs Z$5 billion dollars — or a month’s salary for those people.  Sure, our economy is bad, but at least you don’t have to work for a month in the sun to get a bottle of Crisco.

As a bonus, no one probably waved a machete at you today or fired an AK in your neighborhood. (unless you live in Gary) 🙂

Its true that all great civilizations eventually fall, the Egyptians, the Mayans, Romans, Greeks…the list goes on, but I don’t think this market downturn is our great fall. Not yet.

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One Response to “The Economy Isn’t so Bad”

  1. You are so right. If we all followed the crowd we would all be broke, paranoid, and frozen in fear over our jobs and the economy and everything else happening in America today. I vote that everyone go on vacation. Not only would the spending help revive the economies of the world but people would come back like people often do from vacation–tan and happy and relaxed!

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