Is Stock Market Barometer Of Economy?

Delhi, India (PressExposure) July 21, 2009 -- Many assumes that stock market is the barometer of the economy i.e. it represents the state of the economy.

Actually this year market is already in an upswing ,so many assume that the stock market represents the state of the economy.

The Finance Ministry mandarins too seem to be caught up in this web of confusion. That is the primary reason for this distorted obsession about the market, and there are several factually incorrect assumptions about the market's role.

It is true that present economy is suffering from recession but crisis has its own benefits also ; The recent recession has many of us in a situation worse then we were in just a few months ago. The media has jumped all over the recession and has even compared it to the Great Depression in some respects.

1. It has improved global co-ordination - Just look at how much the US has coordinated with other countries in this crisis. Global coordination is important for efficient government and world economies.

2. Has gets societies attention and wakes them up -You can't say that you haven't changed your way of life at least a little since this recession started. From ripping up credit cards, to forgoing that purchase of the designer handbag, Americans are becoming smarter with their money, and more frugal.

3. Efficiency in development- the general public on a personal level, they learn to spend less, and get more out of what they already have. Unfortunately this means companies may lay off workers too though.

4. Falling prices -Everything from airline travel, to gasoline Prices, to home prices, and stock prices have fallen quite a bit. If you have the cash now, you can invest fruitfully, and everyone can take advantage of lower gasoline prices for the time being.

5. Prevention of large market bubbles -Without a recession and economic downturn, bubbles would just get larger and larger, and the larger a bubble gets the more damage it will do when it pops. This recession probably popped quite a few bubbles in various investment markets.

Depression is not real; it's the energy behind the 'appearance' of reality. It points to a state of being held in place by people. The emotional state of the union needs to be addressed. The emotion that gives life to a vibrant thriving economic powerhouse is at the other end of the scale where you find happiness, joy and even bliss. Energy precedes the state of the economy. Energy precedes everything for that matter.

Despite the lack of understanding by some economists the greatest economic periods in this country's history and the world itself are ahead of us. The evidence for this is in the wealth that we currently see in the world, the technology and the sheer numbers and resources the planet provides.

This one has lasted longer only because our focus has been heavily sustained on the depressed state of mind the government, some industry leaders and the perpetual reports broadcast by the media. The media would well serve its constituents, both readership and business communities alike, by sighting every bit of evidence of growth happening.

So the conclusion is that stock market is not really a barometer of economy, but its can effects on economy.

Press Release Submitted On: July 21, 2009 at 6:48 am
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