IMPORTANCE OF STOCK AND OTHER FINANCIAL MARKETS
Stocks tumbling all around the globe on the wake of the sub-prime issues in the US, gives non believers in stocks enough mileage to further their self fulling prophecy of wisely staying out of it. But can anyone really be totally unaffected by stock markets. In capitalist and mixed economies atleast, it is not possible.
Even if you are not invested in the markets, you, your spouse or your parents are working in a company that is listed in the market and hence their compensation is invariably tied with the performance of that company's stock, which in turn is tied with the general health of the country's stock market and the global market trends. Indirectly all the products and services you make use of, is provided by corporate entities. So a stock market bubble burst may close down these companies or drive their product/service prices northwards. My roomie Suresh, still was not convinced with this line of argument. He questioned how come a beggar on the road is affected by the markets. But is it not obvious? Ultimately it is a person employed with a listed company or a stock trader who drops coins to the beggar.
So who can be the real ones who are totally unaffected by stock markets. There are two possibilities. One is a perfect socialist state. Also this socialist state should remain a closed economy, meaning not trade with other countries of the world. Such a closed socialist country where the state owns all means of production and is the only employer can remain unaffected by the stock markets. But such idealism cannot be applied to our world.
The other are the tribal groups that are totally secluded and have no means of communication with the rest of the world. There are only few groups that are present like that in today's world. The kalahari bushmen from Africa and few trial groups in the Andaman like the Sentinelese, Negrito and the great andamanese.