Reply #37: The terror behind the economic numbers

[54anickel]

http://www.clifdroke.com/articles/aug2006/082106/article.mgi

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One thing economists rarely make reference to in the ongoing discussion of the global economic boom is the effect that mass psychology has on the economy. Although consumer sentiment indexes do exist they are interpreted with a rather straight-forward conventional approach instead of from the contrarian psychological standpoint. Bombings, and equally significant ­ the fear of bombs ­ has been the X-factor of the global economy and U.S. stock market this year. This will be the focus of the second half of our commentary.

By my count there have been at least 700 terrorist bombings (not counting military bombings) since the beginning of this year through August 18 on a global scale and mostly in the Middle East. This number doesn't include the number of bombing attempts that failed or bombs that were diffused, nor does it contain the growing number of bomb threats (which can have the same psychological impact as an actual bombing). The total death toll this year from all non-military bombings is just over 3,200. Most of the deaths occurred in the Mid-East region. The number wounded from terrorist bombings so far this year is well over 10,000. If we combine the number of deaths from all forms of (mostly) Mid-East violence this year, military and terrorist, the number killed is in the tens of thousands. (In a future commentary we'll discuss the population reduction motive behind bombing campaigns but for now our focus is on the psychological/economic effects of bombings).

That strategically timed bombing campaigns, both terrorist and military, can provided an added support beneath the major stock markets as well as bolster the global economy, was a profitable discovery made by the global financial controllers. This is because both the market and the economy are buoyed and to a large extent driven by the base human emotion of fear. The more fear is generated through bombings and other forms of orchestrated terror, and the more this fear is emphasized by the media, it serves as an economic shock absorber and can prevent severe stock price declines from occurring. This was the formula used to halt the stock market slide of 2001 and also has been used to great effect ever since.

To see how "bombing support" has worked this year take a look at the graph provided below of the Dow Jones Industrial Average for the year to date. Notice how major terrorist bombings strategically bolstered the Dow at a number of points along the way and in some cases seemed to provide the market with some extra impetus:

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