While modern man is no longer surprised by the changing seasons, he does have problems accepting the economic climate. We rationally adjust to the cycles of the sun but are unable to accept the empirical fact that economic activity also follows a natural cycle. In summer, we are too hot and in winter, too cold. So, too, do our economies overheat as they attract irrational exuberance and speculation. And then, inevitably, the booms go bust. Economies decline and even freeze, providing us with economic versions of fall and winter. Finally, as our greatest fears of gloom and doom emerge, the season changes. Emotional darkness declines as rational light increases. The economic climate warms up. New ideas and opportunities take root and the economy springs forward.
- Martin Rapaport
www.diamonds.net
Spot on.
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