Prediction for tomorrow’s market? Anyone? Will it keep declining as it is now? Or will we have to face a big depression this time?
As for now, many brokers have to change their title from ‘broker’ to ‘broke’r with the current market situation which is not promising at all. This nightmare is happening all over the world, without any exception, including rich nations.
And how would that affect us? Do we have to be worried if the market keeps going down as the counter closed each day? We are not investors, so why should we concern about it?
If you think that there’s nothing to be concerned if the market are facing downfalls every day, you might want to re-consider your words. We are not living by our own even though we do have consistent incomes every month. Dependent, might be an appropriate word to describe our lives.
Where will we go before we can prepare our dishes? Groceries. That means, we are depending on them to get raw materials before preparing our dishes. Where should the stores go to have enough supplies for us? Well, it depends on what type of supplies that they want. For example, if they need supplies for breads, they will look for factories that produce breads. And now, what will the factories need to have before they can produce breads? Wheat? Now they will need to look for wheat’s suppliers, e.g. Farmers. But, before the farmers could supply it for the factories, they will have to plant the crops first. Will it stop there? It won’t, but I will stop there as this post will never get posted on my blog if I were to write all the relations.
What is the relation to our current economics? To make it simple, when the market falls, the price of stocks will fall, meaning the companies who owned those stocks will have less money because their companies will have less capital to run their production lines. And those companies are coming from all different industries; Agriculture, Technology, Energy, etc. So, when they have less money for their productions, that means, they will either turn into bankruptcy, or they will lower their productions, and this will affect the price of the goods. But how? Well, for example, if you want to sell computers to your friends in your class, and you are the only one who sells computers to 20 others, you can charge any price you want because your classmates do not have alternatives to buy computers. But, what if there are four more people in your class, who also sell computers, will you stick with your current offered price? Or will you lower your price to compete with the other four?
So, now, if you are asked again whether the current economic downturn affect your lives, what will be your answer?
(Sigh, stocks keep falling, short sale perhaps mates?)
Am stopping here.
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