5 Baseless Conspiracy Theories That Investors Should Shun
By John Persinos
We just celebrated the Juneteenth holiday, when stock and bonds markets were closed. Indeed, June is usually a quiet month for U.S. financial markets, with stock trading volumes tapering off as summer nears.
Today, let's take a step back from the daily ups-and-downs of the markets to examine a "big picture" topic: conspiracy theories about the financial world.
Conspiracy theories abound, most of them patently absurd. Many of these theories are disseminated through various media by America's foreign adversaries, to undermine our society. That notion seems like a conspiracy theory in itself, but it happens to be true and well-documented.
Baseless lies about conspiracies have infected the bloodstream of our public discourse, like a virus. It's not just politics. The investment realm is prey to conspiracy mongering as well. From whispers about manipulated inflation rates to grand narratives involving secret societies pulling the strings behind financial markets, these theories captivate the gullible and lead to bad investment decisions.
Below, I delve into some of the most popular financial-related conspiracy theories, why they are ridiculous, and how they can harm investors.
1. The Government Is Manipulating Economic Data
One of the most enduring conspiracy theories is the belief that governments manipulate data concerning gross domestic product (GDP), inflation, and employment to present a rosier economic picture. Proponents argue that inflation and unemployment are much higher than reported, and GDP growth much lower, suggesting that official figures are doctored to maintain public confidence, garner votes, and suppress social unrest.
Why It's Ridiculous: GDP, inflation and employment gauges involve a range of data sets, with rigorous methodologies in place. While no measure is perfect, data manipulation on a massive scale would require collusion among numerous independent entities, statisticians and academics, which is highly improbable.
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