'Consumer Confidence' and the power of deception.

[Andy Worhal]

As always, ToS will be in effect. In addition, I am hoping people with a backing in Economics will respond. It is not that the subject is exclusive to them, but rather so they might supplement my knowledge and correct me if needed.

So, I am the first to admit I have little formal training in economics. However, there is a concept that greatly interests me, especially in light of the current economic situation. That concept is Consumer Confidence.

As I understand it, consumer confidence is the faith that consumers in the current strength of the economy, be it local or global. While consumer confidence is true of any consumer, there seems to be a select few persons who exert great influence on the confidence of others. It also seems that their 'confidence' is not factual, but intuitive.

To economists and ethicists I ask; how ethical/possible is it to essentially lie about the confidence of the market, even if it would perhaps help the global situation? Consumer confidence seems to work like an optical illusion- if you believe its real, then it is real. If this is true, then I wonder if it would perhaps be appropriate for these few influential people to simply agree to believe the economy is strong so as to build it back up.

Feel free to answer either from an ethical or economical stance, especially if you can shed more light on consumer confidence and where it comes from.


Also, what's your opinion on Austrian Economics?

Or Milton Friedman or Ludwig Von Mises?

[Andy Worhal]

I admit to hijacking this topic, however it was interesting and I hope to shed some new light on it by editing the OP.

[Celestial Horis]

Firstly, I would like to be honest and say I have no experience in economics what so ever. However I will give a response to your question to serve as a bump so those with more experience can reply, and to give my 2 cents about the matter at hand.

As you said, "Consumer confidence seems to work like an optical illusion- if you believe its real, then it is real" I am not too sure if you are familiar with the law of attraction or mass consciousness, but basically you can obtain whatever you want or attract similar feelings of that by thinking about it, and putting belief into it. So yes, If you believe it is real then it is real. When done on a larger scale in society then it indeed becomes real with swift results. I'm not saying BOOM things will just be better as far as the economy but due to people's outlook on it, necessary steps will be taken to fix it to become better over time. Also it varies from person to person. I think it would be very ethical ,possible, and beneficial if influential people just say the economy is strong regardless of what they are faced with. The facts don't count if you have the right mind set and faith in your goal.



P.S Nice Avatar. It has a simple but regal look.

[Kaltros]

Modern mainstream economics is a lot like magic tricks and voodoo and astrology and things like that. It has a dubious relationship to reality, and depends on subjectivity and shared belief in some myth or other. Fiat currency is one example. Paper money has little use besides as a medium of exchange. It was appointed by governments for that task. But when enough people lose confidence in the government that issued the paper money, it loses any perceived value. Then you can use it for... what? Fires? Toilet paper? Wallpaper, maybe?

At least when gold became a medium of exchange through market forces, it also had other uses, such as for jewelry and other things. Or whiskey. That's not a bad medium of exchange and 'liquid asset' either. Tobacco has been used occasionally, and you could smoke/chew that no matter what it's value as a medium of exchange.

But paper currency? Who wants to smoke or eat that?

[Project 429]

Kaltros

Modern mainstream economics is a lot like magic tricks and voodoo and astrology and things like that. It has a dubious relationship to reality, and depends on subjectivity and shared belief in some myth or other. Fiat currency is one example. Paper money has little use besides as a medium of exchange. It was appointed by governments for that task. But when enough people lose confidence in the government that issued the paper money, it loses any perceived value. Then you can use it for... what? Fires? Toilet paper? Wallpaper, maybe?

At least when gold became a medium of exchange through market forces, it also had other uses, such as for jewelry and other things. Or whiskey. That's not a bad medium of exchange and 'liquid asset' either. Tobacco has been used occasionally, and you could smoke/chew that no matter what it's value as a medium of exchange.

But paper currency? Who wants to smoke or eat that?

All resources have value based on consumer confidence, including gold, tobacco, and whiskey. The gold standard is just as arbitrary as any other standard. You could have a pork pie standard, if you wanted.

[Andy Worhal]

Celestial Horis

Firstly, I would like to be honest and say I have no experience in economics what so ever. However I will give a response to your question to serve as a bump so those with more experience can reply, and to give my 2 cents about the matter at hand.

As you said, "Consumer confidence seems to work like an optical illusion- if you believe its real, then it is real" I am not too sure if you are familiar with the law of attraction or mass consciousness, but basically you can obtain whatever you want or attract similar feelings of that by thinking about it, and putting belief into it. So yes, If you believe it is real then it is real. When done on a larger scale in society then it indeed becomes real with swift results. I'm not saying BOOM things will just be better as far as the economy but due to people's outlook on it, necessary steps will be taken to fix it to become better over time. Also it varies from person to person. I think it would be very ethical ,possible, and beneficial if influential people just say the economy is strong regardless of what they are faced with. The facts don't count if you have the right mind set and faith in your goal.



P.S Nice Avatar. It has a simple but regal look.

Thanks for the compliment!


You're telling me that consumers shop with the brain as opposed for items?
Where are the limits then, aren't there an unlimited amount of desires that one can have?

Do you think it's beneficial to ignore matters like inflation with the right mindset?

[Kaltros]

Project 429

Kaltros

Modern mainstream economics is a lot like magic tricks and voodoo and astrology and things like that. It has a dubious relationship to reality, and depends on subjectivity and shared belief in some myth or other. Fiat currency is one example. Paper money has little use besides as a medium of exchange. It was appointed by governments for that task. But when enough people lose confidence in the government that issued the paper money, it loses any perceived value. Then you can use it for... what? Fires? Toilet paper? Wallpaper, maybe?

At least when gold became a medium of exchange through market forces, it also had other uses, such as for jewelry and other things. Or whiskey. That's not a bad medium of exchange and 'liquid asset' either. Tobacco has been used occasionally, and you could smoke/chew that no matter what it's value as a medium of exchange.

But paper currency? Who wants to smoke or eat that?

All resources have value based on consumer confidence, including gold, tobacco, and whiskey. The gold standard is just as arbitrary as any other standard. You could have a pork pie standard, if you wanted.

You can eat pork pie and drink whiskey whether the government issues and backs those things or not. But it's not quite the same with government-issued currency. Government creates currency as well as provides it value. Take away that government support, and what independent reasons would people find to value paper currency? Not much, I'm thinking.

On the other hand, people can find lots of reasons on their own to value gold, whisky, rum, tobacco, and many other products.

Subjective value is arbitrary in each case, but they have different qualities. Whiskey is valued at the grassroots level, so to speak. Paper money is valued from the top down. The government keeps telling you it has value until you start to believe them, because of their authority.

See the difference?

[Project 429]

Kaltros

Project 429

Kaltros

Modern mainstream economics is a lot like magic tricks and voodoo and astrology and things like that. It has a dubious relationship to reality, and depends on subjectivity and shared belief in some myth or other. Fiat currency is one example. Paper money has little use besides as a medium of exchange. It was appointed by governments for that task. But when enough people lose confidence in the government that issued the paper money, it loses any perceived value. Then you can use it for... what? Fires? Toilet paper? Wallpaper, maybe?

At least when gold became a medium of exchange through market forces, it also had other uses, such as for jewelry and other things. Or whiskey. That's not a bad medium of exchange and 'liquid asset' either. Tobacco has been used occasionally, and you could smoke/chew that no matter what it's value as a medium of exchange.

But paper currency? Who wants to smoke or eat that?

All resources have value based on consumer confidence, including gold, tobacco, and whiskey. The gold standard is just as arbitrary as any other standard. You could have a pork pie standard, if you wanted.

You can eat pork pie and drink whiskey whether the government issues and backs those things or not. But it's not quite the same with government-issued currency. Government creates currency as well as provides it value. Take away that government support, and what independent reasons would people find to value paper currency? Not much, I'm thinking.

On the other hand, people can find lots of reasons on their own to value gold, whisky, rum, tobacco, and many other products.

Subjective value is arbitrary in each case, but they have different qualities. Whiskey is valued at the grassroots level, so to speak. Paper money is valued from the top down. The government keeps telling you it has value until you start to believe them, because of their authority.

See the difference?

Yes.

[Project 429]

Just kidding, you still opted for RON PAUL esque sloganeering rather then address the problem of consumer confidence. The 'grassroots' value and the governmental value are not interrelated in your example and are wholly arbitrary because of it.

[geminikitten]

Wasn't this exact same question asked about a month ago?

You can only lie so much about prices to affect consumers because the supply/demand thing is still there.

Raising confidence is to induce spending correct? That means more money circulates in the economy but that results in higher interests. Prices of things just go up in response to the higher demands. Those things result in less spending eventually.

Also, no point lying about the economy if no one can afford anything to begin with as well. You can say the economy is fine but if most people don't actually have the cash reserves to begin with, it won't have an impact. You can't spoil yourself if your $1000 monthly income goes into living expenses and bills.

Heck, even Japan with 0 interest rates and a horrible habit of saving money aren't spending anything despite not having a negative outlook and it's causing their economy to go into deeper crap than what they're already in.