We are inundated by streams of economic news & data everyday; even the common man is not spared! What to make of these, by even the experts? Most are conflicting in nature with even Nobel laureates at logger-heads as to the reasons & the course of actions to pursue to set right the anomalies.
It is pointless for the man in the street to lose sleep trying to make head or tail out of the myriad permutations & combinations; but he can take a laid-back view of the how they would pan out in the end! All news will pass, whether good or bad, they will follow one after another, ad nauseam; so one should just get used to them!
When interest rates go up or down, are they good or bad news? That depends a lot on us! If we have no borrowings, interest going up does not matter; if we have money to spare, it is welcome news as we can get better returns on our deposits! The reverse applies when the interest rates go down; good for borrowers but not for those with money to invest! Then again, the latter can switch to other investments like stocks or bonds!
Like for individuals, the same principles apply for countries; better to live within the means, be ready to seize the opportunities, as & when they appear, with reserves at hand. Better also, not to be beholden to others for essentials & have alternatives to sustain in the log run.
Cross- border investments have been a double-edged sword with incidents anywhere upsetting the calculations & throwing daily lives in disarray. But the advantages have made them stay rather than going back in time for closed borders. Tapping the talents & markets all-over, has benefited us all. We face the same destiny, after all!
Better that speculation does not decide our basics, as every calculation can come a cropper. Stocks & currencies can go up & down more than we ever expect! Our lives should be based on sustainable basics like education, hard-work, family well-being etc. Economics is not an exact science like Physics or Chemistry, with more permutations & combinations with also human psychology thrown-in! Panic attacks & mass hysteria can wipe out life’s efforts at one go; only few can rise again from the ruins.
Let more of us do the right thing; expect the unexpected & be ready for them! Invest in ourselves on basic principles & assets that would outlive the vicissitudes of economic cycles than become victims of greed by living beyond our means.
Even in the recent financial melt-down, some made fortunes through their correct calls that speculation would not pay. They bet against the flow & won. The opportunities present themselves but most cannot bet & make a life out of them. For us, let economic news just be news, taken with a pinch of salt, without getting carried away!