A Clear Explanation of What a Free Market Can Do Better Than Government

Let's take a look at a clear explanation of what a free market can do better than government. Before we get tot that a quick summary of what's going on out there in Market World.

We're either at the start of a new bull market or we've entered a classic bull trap. We all know that a bull market would take stocks ever higher for some extended period of time. Some even believe we're headed into a long-term "secular" bull market. The bull trap is a kind of set up where stocks are manipulated higher to draw in unsuspecting victims. It serves those who wish to sell their positions before a correction or, perhaps in this case, a resumption of a Bear Market that started in 2021. When they've sold all they desire, they step aside. There's no one left to buy. Those who stepped into the trap are left holding the bag. The trap springs shut and the market heads down with a vengeance, sometimes crashing, sometimes simply falling relentlessly until those trapped panic and sell at the lows.

So there's a summary of our current stock action, action which has been up lately, albeit quiet last week.

Not much more to say for stocks. As for bonds, they've been bouncing around after an initial fall signaling what is likely a long-term secular bear market. Gold and the other precious metals continue to disappoint many, and thus engender a lot of pessimism. Such pessimism frequently precedes a new bull leg in what has been an ongoing secular Bull Market.

There's two cents for you.

With that, here's something to up our economic intelligence, something many of us could use. It's that clear explanation of what a free market can do better than government we mentioned before. If you're a free market skeptic, worse share some form of socialist or fascist beliefs, just read this ant think about it. If, on the other hand, you're a a free market cheerleader, this will reinforce your current set of beliefs. But read it anyway, as it might actually explain what it is you may blindly "believe in" regarding the best sort of economy.

It won't settle the debate over free markets, but it's simply and to the point. When you're done reading and thinking, enjoy the rest of the weekend.

The economy is a complex living organism. It continuously evolves and is always subject to change. One relationship at one moment can be completely different at another moment.

Supply and demand are incessantly adjusting and readjusting to meet the conditions of the market. These continuous interactions provide a natural and efficient response to supply shortages and gluts.

In the case of agriculture, in countries with minimal government interference the food supply is almost always in abundance. Any shortages are quickly resolved.

In an economy with minimal government interference, a farmer doesn’t look to a governing board to know what crops to produce. He looks to prices.

If the price of wheat is high. That means the supply of wheat is low. Thus, he plants wheat. Because, at that moment, wheat is what people need most. Price signals communicate this.

But once the supply of wheat increases, and the price falls, he may look for other crop options to maximize the value of his land. Perhaps milo, or some other cattle feed, is demanding a higher price.

Consequently, he plants milo. The cows then get fed, and an adequate supply of milk is brought to the market.

But once the excess supply of harvested wheat has been consumed. And its price increases. He goes back to planting wheat. Through it all, stomachs remain full, and prices remain within orbit.(Click HERE for the full article.)