At first glance, this may seem like a ‘head for the hills’ type of warning, but if we analyze it further, some interesting things come into consideration. Some questions to ask are:
- Who is this guy?
- What are his credentials?
- What type of research has he done?
- What kind of evidence did he present to support his claims?
- Why should I believe him?
- What are his interests (in terms of vested interests)?
- What motivates him?
- What motivates the television network?
First, you may have noticed something odd about his body language when he was speaking, especially when discussing the so called double-dip recession – he was looking down a lot. It is often said that when a person is lying they look away because subconsciously they feel that the eyes reveal the truth. So a person will hide their eyes from you in an attempt to conceal the truth from you.
Second, he mentioned two things in particular that I found interesting:
1.) He prays for market collapse.
2.) He wants to make a lot of money.
These two motivating factors, coupled with his shifty behaviour, lead me to believe that he is shorting the market. It wouldn’t be too hard to believe that someone would go on national television and incite fear into people for their own personal gain. It is also common for media outlets to run stories of disaster and gloom.
A very funny comedian named Josh Blue had an interesting point about the economy. He asked his audience one night, ‘you know how the government can get us out of the recession?…the same way they got us into it, by telling us it’s over.’ For the video, click here.
When I heard that I laughed, but then I quickly thought, “hey, that could work!” Could that work? How much of the economic downturn is perpetuated by gloomy news? Anyone who has taken a first-year economics course has learned about the paradox of thrift. The idea is that in times of economic downturn (or even word of an upcoming downturn), people put off big purchases (and sometimes even small purchases too) – instead opting to save their money. They are worried about the security of their job and being able to support themselves or their families, so they become thrifty. But because they do this (and most people do this) it actually causes the economy to suffer. As the economy gets worse, people reduce their spending even more and the situation gets worse and worse.
So, in conclusion, I would take what this guy says with a grain of salt. After all, for every person who proclaims doom and gloom, there’s probably an equal number of people who are optimistic about the future of the global economy.
Article by Edward Mullen
Host of The Edward Mullen Podcast