PABLO MARÇAL – PÂNICO – 10/08/22

America is a place where consumer confidence, that fickle, ethereal almost, indicator of a market’s health, is closely linked to natural disasters and national crises. Let’s look at 9/11 for example. Consumer confidence right across the US plummeted the day after the attacks and took more than eighteen months to recover, a period during which, much of the economy was driven through tourism and foreign income from Britain and Europe.

In the free market system, when demand exceeds supply, prices rise, and there’s excess profit. So, new supply is created, until excess profit disappears. This is a mechanism to keep supply and demand in equilibrium. “Speculation” helps keep future supply and demand in equilibrium, to prevent future shortages.