Who, What, When, Why and Where of the Economy

There are five questions that are often reviewed when investigating a subject:

1. Who?
2. What?
3. Why?
4. When?
5. Where?

In this case, the "Who?" is us, the people that live and work within the economies of the world.

The "What?" is the economy and the financial markets. These are often different things that are confused as being one and the same. The financial markets include the corporate and government bond markets, the stock market, the over-the-counter derivatives market, etc.

Wikipedia defines economy as:

"the realized economic system of a country or other area. It includes the production, exchange, distribution, and consumption of goods and services of that area."
(Reference http://en.wikipedia.org/wiki/Economy).

In other words, the economy is the real world that we live in that exists when we create, buy, sell, and transport stuff.

Our goal at Dredd is to understand what's going to happen in the real world (which we will also call the real economy) by studying the financial markets. However, there's a trap that about which we have to be conscious. It is often believed that the stock market, in particular, foreshadows what will occur in the real economy. This is not necessarily true, and that will become more apparent as we discuss the "Where?" in detail.

The "Why?" is a long and complex topic that requires enough understanding of economics, history, and politics that it simply cannot be addressed in a single essay. The "Why?" explains exactly why were are where we are. Once you understand the "Why?" then the final outcome of this little economic downturn will become more obvious. This is where, dear reader, we need you to take some initiative for yourself and your family and do some critical thinking. If more people understood the "Why?" then we would have avoided this mess in the first place. We need more people to understand the "Why?" so that we don't have this problem again. The "Why?" is the primary reason that we have opted to write on educational topics such as money, credit, debt, inflation and deflation, capital and many other topics. This is going to take some time, so bear with us. The investigation of the "Why?" is going to challenge your belief system.

The "When?" is a complex question that involves both a better understanding of the "Why?," some fundamental analysis, and to make sure that things are on track, some technical analysis. As we move forward, our goal is to make this more clear. We have a longer term sense of where things are going, and a shorter term means of tracking the progress.

Finally, in our first real analysis for the Dredd Market Report, we're going to talk about the "Where?" If you want to protect yourself, you need to know where we are in the economic cycle. In order to get a sense of the "Where?" we must first look at the big picture, sprinkle a little bit of the "Why?" in for discussion, and get some context. Our goal is to finish this race in one piece with something to show for it. If we want to finish the race, we need to know how far we are from the finish line and what terrain we're going to encounter as we continue on. Are there "green shoots" out there or are we headed for shark infested waters?