Sunday, October 12, 2008

Economy 1-0-1

I picked this '4 dummies' book at Barnes & Noble's on Fifth Avenue last month, during a short tourist escapade to Big Apple. I am not that 'big' about book reading (although I am a bit of a book collector, more than 800 owned without a single 'fiction' accounted for; fiction? - maybe a couple of dozens there... that's it).

'4 dummies' books are not that bad. On the contrary... some are great! Especially this one.

Let me give you a great example. It's copied from the 'Understanding the US Economy' chapter.

It goes like this:

Market experts and those well-versed in economic theory, along with politicians and pundits, like to muddle things up when it comes to interpreting data and formulating working summaries of economic activity. That's how they keep their jobs... by confusing the public when it comes to what's really happening with the economy.

But understanding how the economy works and making it fit your trading approach doesn't have to be that complicated. Simply stated, the United States economy, the largest in the world, is dependent upon a series of delicately intertwined relationships, so keep these factors in mind:

  • Consumers drive the US economy.
  • Consumers need jobs to be able to buy things and keep the economy going.
  • The ebb and flow between the degree of joblessness and full employment, how easy or difficult it is to get credit, and how much the supply of goods and services is in demand drive economic activity up or down.

Couldn't be any simpler than that, could it? BTW, the character bolding is mine.

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