Quote:
Originally Posted by Pleasurepays
"Confidence" plays a short term, minor role. the actual mathematics of inflation and debt are what matter over the long term. people aren't going to make bad investments, invest in a tanking currency and/or economy for the long term because Obama gave a speech. that's not how financial markets work.
|
No, confidence plays a huge role. It's not because Obama gave a speech, it's because someone is in charge whom people feel is competent and because he's going to "do something"......the parallels with FDR are too numerous to list.
People felt like Hoover didn't care and was in over his head. People felt like FDR cared and that he was doing something to make their lives better.
Confidence is huge...consumer confidence is one of the leading economic indicators. When consumers have confidence in the future of the economy, they're more willing to spend and invest. When they have no confidence, the bunker mentality prevails.
BTW, your line about people aren't going to make bad investments?
How the hell do you think we got in this mess? People bought overpriced houses they couldn't afford, got mortgages from banks who sold those bad investments to the bond market, and the bond investors bought credit default swaps to insure against mortgage defaults.
All of those were bad investments, trillions of dollars worth, made by both average consumers and so-called investment geniuses.