Sunday, April 11, 2010

Confidence

That which does not destroy you, makes you stronger! Nietzsche

The Great Depression and the Great Recession have at their core identical causes. The demand is not present because the marketplace has no confidence in the continued existence of the economic order. The lack of confidence is a horrible self perpetuating disease who has wrought devastation on humankind for eons.

The only cure for lack of confidence is positive results. Then and only then will the feelings of euphoria return to help an economy or an individual move forward. The entire economic theory of having government pick up the slack in demand from the private sector is to minimize the death spiral created by the lack of confidence.

Sadly there is no magic mathematical equation to correctly determine the amount of stimulus needed to recharge an economic order drained of confidence. The ebb and flow of human misery however is unending and this economic cycle will turn decidedly positive. Until then remember, "when you are going through hell, keep on going, you might get out before the devil knows you're there"