If I ask you which is the most authoritative financial Media, the Economist will surely be in the first places. Let's see how valid it is? On September 12, 2019, he had published a text entitled "Austria's 100-year bond offered surprising returns". So far the title is correct since its trading price was almost twice its issue price. The magazine continued under the headline "its price will crash if interest rates rise". Again, everything is fine, even if he told us the obvious. But where he ventured and placed himself, and where his validity is judged, is in the second part of the subtitle, which told us: "But most buyers won't live long enough to regret it." I don't know if all the previous buyers had died within the next 6-9 months, so I can't say for sure how stupid the last comment was.<\/p>\n
I don't want to be unfair to the magazine in question. I had the opportunity during that time to participate in conferences and discussions with the best and "best" economists in the world. People who either taught at the best universities in the world, worked in Central Banks and Ministries of Finance, or served in independent bodies such as the Fiscal Councils.<\/p>\n
At the time, the FASHION was that inflation had been defeated, interest rates would remain perpetually near zero, and that the global economy would experience steady economic growth. All together, coordinated, willingly or unwittingly, burdened the citizens with false information and together with government bonds that lost a huge part of their value.<\/p>\n
In the previous paragraph I did not accidentally write the word FASHION. Unfortunately, the biggest danger facing, not only the economy but the entire society at the global level, is FASHION. Whoever is of FASHION speaks and is listened to, whoever disagrees (there may be many), either remains silent or is ignored.<\/p>\n
The above is one of many examples. Somebody or somebody managed to get the message out about interest rates and inflation, and the academic and professional community followed the FASHION.<\/p>\n
All one needs now to win is to find a way to market the idea. Any idea. To make it FASHION. "Green bond"… wow. Now what the color or name of a bond has to do with its performance, here we are, only a marketer can explain to us.<\/p>\n
I am not advocating that a new fellow citizen of ours should not be elected Prime Minister of Canada or New Zealand. Or that there should be no black transgender divorcees on the Supreme Court. Or that environmental awareness should not be incentivized. What I'm saying is that it shouldn't be the other way around. Let's not proceed with an act simply because it has become FASHION. Let's not blindly follow someone or their advice because it became FASHION.<\/p>\n
I know, it's easier to follow FASHION than to "waste" resources analyzing and evaluating. However, the most likely thing is that for the mass of citizens, the course of each MODAS decision will at best be equivalent to the Austrian centenary bond.<\/p>\n
That's why, at least for serious matters, a little thought and analysis doesn't hurt.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The text discusses the credibility of the Economist as an economic media source and criticizes the trend of following popular opinions without critical thinking. It mentions an article published by the Economist in September 2019 about the impressive returns of Austria's centennial bond. The text also highlights the danger of blindly following trends and the importance of thoughtful analysis.<\/p>\n","protected":false},"author":2,"featured_media":2846,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[91],"class_list":["post-2845","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-cyprus-cyprus"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n