Hands framing

It has become a cliche these days to hear sayings like “in this economic climate,” or “in these difficult times.”  And of course it becomes a self-perpetuating prophecy.  Are these statements the whole truth about today’s economic climate?  First, people selling gizmos of various kinds, people who run restaurants, and folks in service industries, will tell you that customers are spending less money.  Why?  Because they are making less money.  Why are they making less money?  Because their customers are spending less money.  Why is all this happening?  Because of difficult economic times!  It is somewhat of a self-fulfilling prophecy.  The more we believe it, the more it becomes true.  The other thing that is true about these times is that it’s not longer so easy to make money from having money.  Back in the 90’s you could buy a house for $200,000 and, if you played your cards right, you could put 5% down ($10,000).  If the house went up 50% in value (which many houses did over just a few years), it then became worth $300,000.  You just made $100,000 on an investment of $5,000.  That is a 2000% profit.

The same thing could be done at that time in the stock market, or just lending money to start-up businesses.  Why?  Because everybody had the opposite belief as we have now.  It was boom time!  People were using worlds like “great opportunities” and “leverage.”  Everybody believed that story together, and it became another self-fulfilling prophecy.
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