Trust ... plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country's institutions and leaders, political legitimacy breaks down. Much recent evidence indicates that trust contributes to economic, political and social success.
Forbes wrote an article in 2006 entitled "The Economics of Trust". The article summarizes the importance of trust in creating a healthy economy:
"If you take a broad enough definition of trust, then it would explain basically all the difference between the per capita income of the United States and Somalia," ventures Steve Knack, a senior economist at the World Bank who has been studying the economics of trust for over a decade. That suggests that trust is worth $12.4 trillion dollars a year to the U.S., which, in case you are wondering, is 99.5% of this country's income.
Traditionally, gold has been a store of value when citizens do not trust their government politically or economically.
In other words, the government's political actions affect investments, such as gold.
It is interesting to note that Americans no longer trust their politicians, the justice system, their ability to obtain liberty, or the media. Americans know that the boys launched the war in Iraq (which will end up costing $3-5 trillion dollars) based upon justifications which turned out to be untrue. Many Americans have read that the government imported communist Soviet Union torture techniques and then said "we don't torture". Many Americans also know that the government spied on American citizen (even before 9/11 ... confirmed here and here) while saying "we don't spy", and that the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
This is an economic, not a political, essay. But I think the lack of trust in government concerning political issues poses an interesting question. Specifically, is it possible that the American people's distrust of the government concerning the above-described issues also bleeds over into a lack of trust in the government's economic actions and statements? In other words, if people discover that a government is lying about political issues, do people trust the government's pronouncements about economic issues less?
http://www.marketoracle.co.uk/Article13406.html
Forbes wrote an article in 2006 entitled "The Economics of Trust". The article summarizes the importance of trust in creating a healthy economy:
"If you take a broad enough definition of trust, then it would explain basically all the difference between the per capita income of the United States and Somalia," ventures Steve Knack, a senior economist at the World Bank who has been studying the economics of trust for over a decade. That suggests that trust is worth $12.4 trillion dollars a year to the U.S., which, in case you are wondering, is 99.5% of this country's income.
Traditionally, gold has been a store of value when citizens do not trust their government politically or economically.
In other words, the government's political actions affect investments, such as gold.
It is interesting to note that Americans no longer trust their politicians, the justice system, their ability to obtain liberty, or the media. Americans know that the boys launched the war in Iraq (which will end up costing $3-5 trillion dollars) based upon justifications which turned out to be untrue. Many Americans have read that the government imported communist Soviet Union torture techniques and then said "we don't torture". Many Americans also know that the government spied on American citizen (even before 9/11 ... confirmed here and here) while saying "we don't spy", and that the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
This is an economic, not a political, essay. But I think the lack of trust in government concerning political issues poses an interesting question. Specifically, is it possible that the American people's distrust of the government concerning the above-described issues also bleeds over into a lack of trust in the government's economic actions and statements? In other words, if people discover that a government is lying about political issues, do people trust the government's pronouncements about economic issues less?
http://www.marketoracle.co.uk/Article13406.html
