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<p><a href="https://economicprism.com/skeleton-economics/"><img decoding="async" class="alignleft size-full wp-image-1904" title="Skeleton Economics" src="https://economicprism.com/wp-content/uploads/2012/09/Skeleton.jpg" alt="" width="150" height="150"/></a>“Markets shape opinions,” is a wise saying that reflects a fundamental truth about human psychology and investment behavior. When the market experiences prolonged gains, investors craft explanations for the continued rise. Conversely, persistent market declines prompt narratives predicting further drops.</p>
<p>Everyone is entitled to their own perspective on market movements, whether it holds merit or not. One person might rely on technical indicators to justify their viewpoint, while another might base their opinions on fundamental analysis. Each can appear entirely correct—until the moment they aren't, at which point they must devise a new rationale.</p>
<p>The housing market, in particular, has been devoid of optimism for the past five years. After decades of price increases, peaking during a period of irrational exuberance from 2002 to 2006, the unexpected occurred: housing prices stopped rising and began to fall.</p>
<p>Since reaching their peak in 2007, nationwide housing prices have plummeted by 35 percent. Certain areas, such as Florida and Las Vegas, have faced even steeper declines. Yet, quietly, the housing market may have already reached its bottom without many realizing it. <a href="https://economicprism.com/skeleton-economics/#more-1898" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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<p><a href="https://economicprism.com/falling-off-the-hunger-cliff/"><img decoding="async" class="alignleft size-full wp-image-1767" title="Falling Off the Hunger Cliff" src="https://economicprism.com/wp-content/uploads/2012/08/Corn.jpg" alt="" width="150" height="150"/></a>In the October issue of Smithsonian magazine, it is noted that Thomas Jefferson's notable phrase in the Declaration of Independence—“all men are created equal”—challenged the long-held beliefs of Aristotle, who argued that some individuals are destined to rule while others are meant to be subjugated.</p>
<p>Aristotle's views are clearly outdated and misguided. Yet, if you’ve ever been called for jury duty and spent a day in a courthouse surrounded by peers, you might agree that Jefferson's assertion doesn’t hold universally true. There exists a vast spectrum of human intellect and capability, spanning from brilliance to folly.</p>
<p>According to Thomas A. Patterson in *The American Democracy – Alternate Edition*, Jefferson's claim—despite being a slave owner—implied that all Americans are entitled to equal justice under the law. The Smithsonian article attempts to navigate the contradiction between Jefferson's principles and practices, suggesting that “the paradox of slavery's existence during the American Revolution offers a morally comforting ambiguity that we have often preferred to leave unresolved.” <a href="https://economicprism.com/fallin-off-the-hunger-cliff/#more-1890" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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<p><a href="https://economicprism.com/present-conditions-and-negative-outcomes/"><img decoding="async" class="alignleft size-full wp-image-1306" title="Present Conditions and Negative Outcomes" src="https://economicprism.com/wp-content/uploads/2012/02/MarketResearch.jpg" alt="" width="150" height="150"/></a>There are certain universally recognized truths that any sensible person understands. These are so fundamental that they require no formal learning or validation; they simply are.</p>
<p>For instance, one should avoid giving a Hells Angel biker the middle finger, and it’s unwise to engage in a game of chicken with a semi-truck. Most importantly, evading taxes should be avoided unless one is prepared for serious repercussions from the IRS.</p>
<p>In the realm of investing, the well-known principle of buying low and selling high is universally acknowledged. Yet, irrationally, many individuals often find themselves buying high and selling low, driven by greed and fear.</p>
<p>Interestingly, in markets outside of capital investments, people generally excel at making accurate price-to-value assessments. For example, they easily recognize a fair price for a turkey sandwich as opposed to being overcharged. <a href="https://economicprism.com/present-conditions-and-negative-outcomes/#more-1882" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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<p><a href="https://economicprism.com/what-you-are-up-against/"><img loading="lazy" decoding="async" class="alignleft size-full wp-image-886" title="What You Are Up Against" src="https://economicprism.com/wp-content/uploads/2011/12/GovernmentDebt.jpg" alt="" width="150" height="150"/></a>Recently, the Bureau of Labor Statistics reported a 0.6 percent increase in consumer prices for August. Over the past year, the official figures reveal a 1.7 percent rise. However, anyone who has paid bills or made recent purchases understands that these government inflation numbers may not reflect reality.</p>
<p>If inflation were calculated as it was in the 1980s—before statistical manipulations such as hedonic pricing adjustments were introduced for political purposes—<a onclick="javascript:pageTracker._trackPageview('/outgoing/www.shadowstats.com/article/no-470-august-cpi-ppi-retail-sales-industrial-production');" href="http://www.shadowstats.com/article/no-470-august-cpi-ppi-retail-sales-industrial-production" target="_blank">the consumer price index would show an annual increase of 9.3 percent</a>. This is significantly higher than the reported rate of 1.7 percent.</p>
<p>Such a stark discrepancy is concerning, especially for low-income individuals living paycheck to paycheck, who may find their earnings depleted long before the next payday. Additionally, a 9.3 percent inflation rate poses a challenge for those on fixed incomes, such as retirees and savers. <a href="https://economicprism.com/what-you-are-up-against/#more-1875" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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<!-- .entry-utility -->In summary, these articles highlight the complexities of economic perceptions and realities, reminding us that the narratives we create are often influenced by the market’s behavior. As we navigate these challenges, it’s crucial to approach financial situations with awareness and critical thinking.
