Published: November 05, 2008 Last Updated: September 02, 2021
My Frustration With The "Financial Crisis"I've recently taken to changing Channels or turning off the Radio and TV, whenever I hear the words "Financial Crisis". Talk about a Media beat up. Last month I had the pleasure of hearing Doug McTaggert talk about the Australian and World economies. If you haven't heard of Doug, he is one of Australia's top Economists and is also the CEO of the Queensland Investment Corporation. During his talk, he made the comment that all of the current financial concerns were purely in the Financial Markets and the real Markets were going strong.
That is, the Stockmarket is suffering due to the problems with the Banks and various Funds, but the general economy (where we buy and sell goods and services) is still going strong. The problem is, with the media having a field day with the "Financial Crisis", the everyday person is starting to think that there is a problem and starting to change their behaviours. A good example of this, is a conversation I had the other day with someone that told me that they needed to stop spending so much and focus on paying off their debts. They were concerned with what they were hearing on TV etc. When I asked them if they believed that their job was at risk, they unequivocally stated that they felt their job was perfectly safe. So I then asked them what was different now, then 6 months ago (other then what the media was saying). To which they stated, "nothing". So I ask you, why should someone like that stop spending and focussing on getting debt free? Assuming that they are not already in high, unsustainable levels of debt.
The problem as I see it, is that the Media is creating a self fulfilling prophecy. By this I mean that the average person who sees the doom and gloom on TV, reacts and stops spending and focussing on saving. Even though their personal circumstances haven't changed and don't look like changing in the future. As they stop spending, Businesses that they usually spend their money at, start to experience a drop in revenue. As this revenue drops, they are forced to cut expenses (like jobs). The media then reports on these job cuts and creat even more fear amongst the Average person, causing them to stop spending even more. Before you know it, we have a snowball effect and the real economy does go into meltdown. Then we have exactly what the media is talking about now - their prophecy has been fulfilled.
So I recommend that you do what I'm doing. Stop listening on the Doom and Gloom and continue growing your business. Remember, in every Recession, there has always been someone who has made a tonne of money. So let's focus on being that person.