Trust: the commodity in shortest supply

By Reuters Staff
January 28, 2009

Where do I put my money?
What do I read?
Who do I listen to?
Who saw it coming?
Who made money from it?
Who will make money from it?
Who can I trust?

david-schlesinger-in-the-newsroom
As Davos gets under way, my feeling from chatting with contacts and listening to conversations around me is that one thing the world economy is really suffering from right now is a crisis in trust.

Institutions failed us.
Governments failed us.

Our own intuition failed most of us (George Soros said today that he protected his capital and had a satisfactory return — that’s certainly better than I did!).

Our advisers failed us.
The media failed us too.

So before we buy again, or invest again, or behave normally again, people need an answer to the fundamental question — where can I invest my trust.

I think that’s the issue behind all of the discussions here.

And solving the related questions of “who is trustworthy now” and “what can we do to create trust in governments and institutions” seems a vital first step.

6 comments

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I think we must improve our knowledgments in all aspects, economy,social behaviour and more than this look forward for what we want for us.. What kind of World and education we are looking for,,,When you lose trust you must think about why i had trusted in this analist?? Why i dont study more this subject?Finally i think we are in a education and social behaviour crisis..Not only a economic crisis

Posted by lucas | Report as abusive

Trust is one of the major issues that we are facing with in this crisis. Who do you trust now that large institutions, corporations, CEO’s, investment advisers, political figures in government, the entire government(not individually but collectively), the trade agreements, the people of each country that have manipulated and used in it’s purest form, greed, to live a life they feel they are entitled to. Banks say that no regulation is necessary and government intervention is not necessary and will ruin the free market, CEO’s of some of these large corporations defend their companies balance sheet and say to investors “We are fine, there’s nothing to be worried about, we have plenty of liquidity if need be”, turn around and ask the governments to bail them out because they made large risky investments and now can barely afford to open their doors. The last statement is obviously because they can’t afford to have their stock driven to the ground if they are completely honest and transparent about their companies financial situation. Then these same corporations turn around, after taking huge cash injections from the governments and spend lavishly, once again, just because they were given a hand out and have absolutely no remorse or responsibility for the job they did to run their company into the ground. People of countries need to trust their government and large corporations and banks to do the “right” thing, because as we are seeing now, once trust is broken, it is very hard to regain. Instead of spending the money you receive from a bailout haphazardly, you should try to seriously regain the trust and support of the people who are actually supporting the bail out…in the U.S. case it is the taxpayers.

Posted by Damian Palmares | Report as abusive

This is simply the end game of Keynesian economic policies (on steroids). Governments issuing debt no one wants or needs. Central banks printing money to buy the government debt no one wants or needs. Another bubble. Another bust. Trust? Governments lied. Central banks manipulated. Banks gave unsound advice. Businesses privatized the gains and now want to socialize the losses. The sick part is that voters and taxpayers apparently want more debt, and bigger governments with a greater role in the economy, to solve the problems caused by government interference in the economy.Us fiscal conservatives are getting mighty lonely here in the wilderness these days. But your collective foolishness is making us even more conservative with our money, so good luck trying to stimulate your economies without us as you do your best to destroy the value of financial assets and devalue your paper currencies, and we turn to physical assets and hard commodities to preserve our wealth.Ayn Rand saw it all coming more than 50-years ago. A screenplay for the next Great Depression. Fifty percent of attendees to Davos last year thought their profits and their companies would expand in 2008-2009. HA! Advice from Gordon Brown or Vladimir Putin? HAHA!

Posted by MrBill, Eurasia | Report as abusive

Trust?! I didn’t, I don’t, and I won’t!I am no financial guru or economic expert, but even I saw this coming about five years ago. We watched as everyone around us seemed to be rising to the top at an ever accelerated pace. We couldn’t figure out how people could be affording all this STUFF. We tried to get in on it too, and that’s when it made sense.They money wasn’t real. It never was and it never will be. Money became primary numbers followed by indiscriminate and exponential amounts of zeros in a database. The numbers that are being splashed about are incomprehensible. Money represents resources and it should be linked with resources having a basis in tangible reality.It’s hard to understand who or how people decide what something is worth. It’s as if arbitrary numbers are attached to actions and things that never even made to existing on paper.It would be sound advice to be wary until the financial and government sectors quit making-up resources that don’t exist.

Posted by Average US Taxpayer | Report as abusive

You can trust the people who make the things you use everyday. You can trust the people who understand how to make and design those things,and the people who know how to make more of them. The size of this financial crisis has made it physical. Think of an office building that is falling apart. Nothing works, the building itself is starting to crumble. The first guy you run to is the maintenance man. When you can breathe again, talk to the architect, etc. Get money to the people who know how to turn it into real, tangible things. In the end, they are the only people who will dig us out. It may take them awhile, but they can be trusted.

Posted by David Braden | Report as abusive

It is true that the American people have an issue with trust. Unlike governments that protect their people, ours caved to corruption and capitalism. In 1776, we elected representatives for our democracy because we had to to communicate in government. We have seen those representatives fall in the last year.We live in a very different world than 1776, one in which we have the ability to communicate directly. We are connected in ways that we, as humans, have never been connected before, through the internet, cell phones and computers. We need to restructure our democracy to be an actual representative democracy, because we have the ability to communicate without the need for a representative to facilitate our needs.Why do I need to reestablish trust in another human when I can communicate directly with the source. It is time to send the politicians packing. Because of their corruption, they can join the workforce and ‘look for a job’. We have the ability to be a democracy that our forefathers never dreamed could be possible. We need to take back control of our country. We don’t need corrupt ‘representatives’ anymore.

Posted by Kiki | Report as abusive