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Monday, December 22, 2008

Reverse Psychology May Be Needed To Save Economy...

The biggest threat to our economy right now is the changing American household psyche.

A poll conducting earlier this December by NPD Group, a marketing research company, polled 65,000 consumers and 31% said they were concerned about their job security and had cut back on their spending. But the biggest concern is the 69% of those polled who said they weren't concerned about losing their jobs but were still spending less.

Most people are starting to think that the right thing to do is shop less in a down turned economy. But to the contrary it is the worst thing.

By not spending more it causes a change reaction. Without a doubt unemployment is up, but 93% of the population is still working. When even people who are still making what the are used to making and their lifestyle is not changing and they are not spending that's bad. Not spending just makes things worse. People who are perfectly safe in their jobs could eventually be threatened if the economy doesn't improve.

I always say the economy will not get better until we get some good news, but if all we hear is bad there will be no change. Just continued decline.

If you follow my series "All This Has Happened Before And It Will Happen Again" you will see a pattern throughout history. When times are good people are lining up at the door and when things are bad they are running for the door. Warren Buffet says that when the stock market goes down it's the only sale that people run from. Why is Warren Buffet so rich? He does the opposite of everyone else.

Get out there people and shop. If you are still working and maintaining your life style live your life as normal. If we can have a descent holiday shopping season it could be just the good news we need to get the economy going again. Don't wait for your new President to bail you out. Go shopping!

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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