The Psychology of Money, Markets and Bitcoins

The Psychology of Money, Markets and Bitcoin:
A Comprehensive Easy-to-Understand on How These Three Wonders Work

Everything on this planet is related to psychology. You named it: raising a baby, convincing your parent to buy you something when you were young, getting a date, winning an argument —it's human nature. . . even on sports, poker games, advertising world, and stock market charts — they are fueled by psychology.

Even money is psychology. When you are employed, and you work on a number of days, and by faith you 100% expect that you will get payed on payday. You know you have money even you do not actually have it. That's psychology.

Money Psychology

Actually, the history of our paper bills is based on psychology. Before paper bills were invented, the issuance of IOU's and promissory notes acted as a means of currency. Meaning, one mere promise to pay is where our modern currency came from.

Then they came up with this idea to invent cash.

When you deposit your cash in a bank, your money is literally not with you anymore. It is now based on trust that the bank have it. Your money is turned into computer digits by recording your account number and balance.

But beyond that, you know what the banks do with your money? They lend your money to someone through issuance of credit cards (by the way it is also based on computer records using magnetic chips. In other words, it is not "tangible" money anymore), loans, bonds, T-bills, etc — and in that way, the banks knew they will earn by getting that money back plus interest based on a mere promise to pay. Again, psychology.

The "new" money made by the banks is created by debt.

And they also earn big time money by investing on market. Stock market. You know, how did the banks get their high-rise buildings constructed? It's because they earn money through stock market. And funny as it seems, they got paid on interest by the very contractor that they hired and get loaned.

Anyways, as far as I know, they earn an average of 25% or more annually on stock market. But how much did you get when you deposited your money on a savings account?

Just a fraction of a mere 1% interest rate.

So now you wanna know how the stock market works?

Again, it is based on psychology.

Market Psychology

Market psyhcology is the overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group's overall investing mentality or sentiment.
[source: Investopedia.com]

To illustrate this: when news broke out that some publicly-listed company X will invest on a high-tech cutting edge technology, usually the sentiments of the people bought that idea and tends to buy more stocks or shares. That's psychology. In effect, the volume of trading will be higher because people "buys". And when large amount of people buys, the share price gets higher.

When news broke out that the great CEO of a company had suddenly died, or when the company declared massive loss on profits, the sentiment of the people will result in selling their shares. So the stock price will be down.

Or when news broke out that the chicken supply of a fastfood restaurant got scarced, the people suddenly unload their shares because of that.

It was a real-life experience, and that fastfood restaurant is Jollibee. . . and the chicken: the Chickenjoy, which is their bestseller. [As with my personal experience: my Scottish, an English, an Australian, and a Filipino multi-billionaire superior had mutually said, "Chickenjoy is magic."]

Here's what happens:

The image is self-explanatory. People unload their shares when the shortage of Chickenjoy supply had happened.

Another one, when a world-class casino owned by Belle Corporation led by Henry Sy suddenly decided to transfer shares to an unknown Sinophil Corp (now Project Leisure Corp. in case you will verify). . . you guess it. Look at this:

This also happens when a company decided to go into an Initial Public Offering (IPO) especially a big company? The sentiment of the people is to buy that resulted to people lining up to the gates of the Stock Exchange Building when the day that IPO gonna go out. But what they didn't know, insiders and elites are being prioritized for this kind of stock offering. They gonna pump the price and boom, suddenly after a week or so, they unload their shares earning [for a lack of a better word] "fraudulent" money.

You know, what we learn here is that the banks, the elites, politics, and government control the money.

So based on psychology, the people felt this kinda bogus. And in return, can you guess what people do to escape from the control of these greedy creatures?

It's a breakthrough: and you heard it already. It is called bitcoin.

Next article: Part 2 of the Psychology of Money, Markets and Bitcoin, and we will tackle about bitcoins. Please follow. Thanks for reading!

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