September 14, 2016

Economies are driven by psychology

If people expect tomorrow to be better than today, they make investments. If they think things are in decline, they wait it out, and that lack of investment makes things decline further. Psychology rules. Almost everything else is just scenery. 

Remember, capitalism is a failure engine. Most businesses eventually fail, but employees get paid while it is happening. You can do a lot of things wrong with your economy and still find a way to fail forward. But the one thing you can’t get wrong is the psychology. That’s a killer.

If you remember your recent history, a global recession started in 2007 and ended in 2009, at least in the United States. See my blog post that accurately predicted the end of the recession in the U.S. in January of 2009, based on psychology alone.



  1. Yes it is a psychology but can be caught in chart by price and volume movement ?