It’s certainly the case that the economy today is a very complicated, fast-moving mechanism based on buying and selling. How could it be otherwise? We live in a world inhabited by nearly seven and a half billion people who are engaged in a never-ending interaction with one another. Some are buying; some are selling; some are manufacturing; some are consuming. Economics as a system allocates the things we need to live. Broadly speaking, if you’re going to get involved in investing your money, you don’t need to know a lot about how the economy works or the finer points of its more obscure corners. You do, however, need to understand some basic things about it.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.”
—John C. Bogle
Value and Price
Saving and Investment
The Effect of Lower Rates
Gross Domestic Product
Consumer Price Index
As a monthly running total of how well companies are selling their products, business inventories are like a big neon sign to economists and investors alike. The business inventory data are collected from three sources:
- Merchant wholesalers
- Retail reports
Retail inventories are the most volatile component of inventories and can cause major swings. A sudden fall in inventories may show the onset of expansion, and a sudden accumulation of inventories may signify falling demand and hence the onset of recession.
Producer Price Index
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