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The Forum > Article Comments > How levels of trust affect economies > Comments

How levels of trust affect economies : Comments

By Dylan Carey, published 27/5/2014

Without the existence of trust in an economic sense day to day life would be a living nightmare.

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Trust is almost as rare as common sense, perhaps the rarest commodity of all!
And once trust is breached by a list of broken promises or failure to follow through, it's almost impossible to recover!
But particularly in the world of commerce, where you are only as good as your word.
When it comes to winning trust, actions always speak louder than words, as does following through, even where that costs you in the short term!
As does cooperating for a common benefit!
After all, 50% of something is going to be a billion trillion times more valuable, than 100% of nothing!
Rhrosty.
Posted by Rhrosty, Tuesday, 27 May 2014 10:36:42 AM
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A thought provoking article.

All economic actors generate spin to justify their contributions (or lack of it) to economies.

This was a key para:

"The private sector is particularly vulnerable in this regard, as has been seen with the Global Financial Crisis of 2008. The crisis occurred largely as a result of excessive leveraging in both the public and private sectors of the economy. There is no mistaking the enormous amount of trust that is involved once a country, government, business and the public start spending beyond their means. This results in entities relying on debts to finance their expenses, rolling over old debts with new ones. Eventually this high trust bubble expands too much and has no choice but to burst."

Assessing spin relies on the public, governments and regulators. The public on average wages need to be critical of banks and stockbroking risk taking, because the public are the most vulnerable. Regulators include the Reserve Bank and APRA http://www.apra.gov.au/Pages/default.aspx

But APRA, the Australian Prudential Regulation Authority, "is funded largely by the industries that it supervises." And the Big Four banks are regularly making record profits. Scratching backs, complexity and trust are all mixed up. Simplicity is unfortunately unrealistic.

Pete
Posted by plantagenet, Tuesday, 27 May 2014 3:26:17 PM
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Our economy is moving along at 3.5% annual growth, right on que.
It seems Joe misread the tea leaves when he said we were in all sorts of trouble. Much more growth than that and we will be overheating and causing inflation, or worse still rising interest rates.
Not that Joe can take any credit for the present figures, all he tends to do is talk the economy down.
Posted by 579, Wednesday, 28 May 2014 1:03:20 PM
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