Most people do not realize the great impact the media has on money and society. Perception plays a huge role in the value of money and financial systems. The media (at least in the United States) often controls our perceptions, and through those, our money.
Financial systems like the economy, home values and the stock market are not based in reality. There is no actual value of a house or true stock price. The price is determined by people’s perception of the value. How is that perception developed? Through what people read and hear.
All it takes is one negative crime report on the local news, and housing prices could drop in a neighborhood. If a company is sued and the media reports it, often the stock will drop — even if the lawsuit is false. The key point is to know that what people perceive will affect their buying decisions. Then the basic economic law of supply and demand goes to work. If less people are interested in buying something, the price will drop.
Unfortunately as an individual, there is not much you can do to change this phenomenon. Still, it is important to understand the affects media has on your opinions and on those around you. Perception within a large group is a huge force, one that has the ability to bankrupt businesses and tear down housing markets.
Take the time to be aware of your perceptions. As you read the paper or watch the news, stop to question how the report makes you feel. Also question how authentic the reporting is and if your thoughts are in line with the severity of the actual report. If each of us took the time to do this, we would be on the road away from simple perceptions and closer back to reality.
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