|Originally published in the March 2011 Socionomist|
As individuals increase their knowledge of socionomics, they view the news in an entirely different light. Subscriber Don Williams illustrated this point in a recent email. On February 24, Williams saw a Fox News television report about the crackdown on Mexican drug cartels. He went to the Fox News website to find a link to the report. While he was there, something else caught his interest.
“The reporters wrote about drug runners being paid not in dollars but in gold bars, because gold bars keep going up in value,” Williams wrote. “I stopped to think about this from a socionomic perspective. This seems similar to the supermodel [Gisele Bundchen] who insisted [in 2007, near a dollar bottom] on being paid only in euros, because she perceived that dollars were worthless!”1
Both the supermodel and drug runners engaged in linear extrapolation—that is, forecasting the future of euros and gold in a straight line based only on the current trend. For more examples, see “Predicting Tomorrow Based on Today”. When laymen embrace a financial trend, it is usually nearer its end than its beginning.■
1Fox special report with Bret Baier (2011, February 24). Foxnews.com.
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Most economists, historians and sociologists
presume that events determine society’s mood. But socionomics hypothesizes
the opposite: that social mood regulates the character of social events. The
events of history—such as investment booms and busts, political events,
macroeconomic trends and even peace and war—are the products of a naturally
occurring pattern of social-mood fluctuation. Such events, therefore, are not
randomly distributed, as is commonly believed, but are in fact probabilistically
predictable. Socionomics also posits that the stock market is the best available
meter of a society’s aggregate mood, that news is irrelevant to social
mood, and that financial and economic decision-making are fundamentally different
in that financial decisions are motivated by the herding impulse while economic
choices are guided by supply and demand. For more information about socionomic
theory, see (1) the text, The
Wave Principle of Human Social Behavior © 1999, by Robert Prechter;
(2) the introductory documentary History's
Hidden Engine; (3) the video Toward
a New Science of Social Prediction, Prechter’s 2004 speech before
the London School of Economics in which he presents evidence to support his
socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net.
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