Tuesday, October 7, 2014

The Only Thing To Fear, Is Actually Fear Itself

So in my research, I came across a significant economic issue in the world today... This issue is Europe.

Recent financial reports show stocks crashing down in the United States due to the stagnant economies of several European nations.

The quick point that needs to be realized here is that fear is the driving force of stock markets. Fear is what causes a stock to go from a hit to a miss. It has been recently noticed also, that there is a major lack of decision-making by European policymakers, causing stress on the markets.

The Dow fell 1.6%, following the slowing down of several European economies. As a result, investors became increasingly nervous, turning to a common safe haven for stagnant market situations in the bond market.

Another effect of this fear from investors is the increase of the value of the Yen, which often is driven up during times of economic decline.

Although there is renewed confidence of in the health of the United States economy, there is still an energetic concern that with the decline in the economies of several European nations, along with the economies of China and Japan, that the global economy as a whole could remain in a state of decline for a longer period of time.

This is certainly not to say that there couldn't be a market correction in the United States, turning profit for investors who wisely allocate their wealth in well-thought-out stock picks. However, the main point is that Europe is scared as hell, and because of that, the American people will be scared too.

Now the big question. Although fear is a major opponent to the positive flow of the free stock market,  can fear drive an entire country's economy into the ground for years and even decades?

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