World War II aftermath, Investment mindset & the Economy

in #investing6 years ago (edited)

This is part two for this post: Do not invest in these things!
If you haven't read that, please do it now and I will appreciate your time and comments. and there will be a third part to this topic, "What to invest in" which is more likely the first part and includes some advisory on investment approach.

So this is the second part I talk about

World War II aftermath

and its impact on economy mindset of people.
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Investment has been always a concern for humankind. I'm talking about Homo-sapiens ofcourse! The other creatures, even the smart ones like some animals, act differently, but still some aspects of investment concerns have been seen in their behavior.

back to our topic; The investment has always been an important life issue, but World War II had a very sever and serious impact on it, that still we are facing its consequences.

The post world war II syndrome

Imagine: after the world war II, most of the economy giants crashed to dust and ruins. economies like Britain, Germany, France, Japan etc, Except Russia (though they had massive losses) and United States, which eventually became two superpowers of the modern world, back those days.

The World War II aftermath, had an enormous impact on markets, consumer behavior and psychology of investment, on people mindset around the globe.

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We have to split the world in to several categories to study this, but we will miss the main topic; So I just focus on:

  • European countries
  • and the US

Europe

And let's be more specific, saying western countries in EU.
Above the ashes of a massive war, they had to find their ways out, back to glory. and they were so determined that they couldn't fail. So the yesterday enemies started economic cooperation and integration, and a common market for important natural resources.
Over a bloodshed, loss of human resources and economy infrastructure, and a generation who have experienced loss of beloved ones and scarce resource recognition during the war, the economy mindset of people turned to be something hardly able to be explained with raw ideas of capitalism, socialism or communism!

West Germany had by the end of the '50s doubled its production from pre-war levels!

It was a socially conservative mindset, respecting their achievements and believing in investment for the wealth of individuals and nations.

United States of America

On the other hand, US had no physical internal impact from the war, enjoying his role on ending the war, the way they wanted! (and many still believe those nukes were unnecessary)
They found themselves, producing roughly half of the world's industrial output at the end of the war, without experiencing same level of damage to society and economy infrastructure.
So they embarked on an economic expansion, which was not imaginable before, in human history.

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wealth and credits

People were becoming rich in US, but the hunger for consumption were not fed enough for industries and wall street bankers. So, the lobbyists started to encouraging people on spending their future to live more todayby money market and capital market instruments like repurchase agreements, mortgages, foreign exchanges and credits.

Most of the above instruments, result in debt, for living better today. So I call it selling your future, for today.

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Sustainability

As American people get more and more drawn in debt, second mortgages, bad credits ...., other financial markets in the world started to collapse! Wow wow wow!
WHY?!
The 2nd law of Thermodynamics say:

The Second Law of Thermodynamics states that the state of entropy of the entire universe, as an isolated system, will always increase over time. The second law also states that the changes in the entropy in the universe can never be negative

So if the economy of US was an isolated system, which is not, there would be no problem for Greece and Italy. But it isn't, instead, the planet is an isolated economy which the density of entropy should be distributed somehow.

Conclusion

Over time, people again will be attracted and aware of the fact, they should invest instead of spend all the money they have (and obviously the money they don't have, which some call it... credit!)
It is essential that you determine a portion of your income money, set aside for investing, being free of any monthly or annual expenses, which will bring you safe margin and even passive income. Unlike the credit which is the expensive money you don't own, such passive income is a money you own and you can do anything with it, with your main asset left safe and untouched!
Therefore, I will write another post on "What to invest in" and explain how I think a proper investment plan can make you rich and let your family live better.

Please stay with me, by following my account; and don't forget to upvote and/or resteem this post, if you found it worth to spread; beside I value your comments and I've learnt from them a lot. You all are amazing ;)
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Very interesting... are you familiar with the work and ideas of Yanis Varoufakis, such as his book "The Global Minotaur"? Of course he has a lot of videos on youtube to check out as well.

I just found out he has served Greece cabinet after ther the crisis. Checked some statements and quotes, on eu and brexit.
I will study more on his thoughts
thank you for mentioning 🙇🏻‍👍

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