The headline worried me: “Bank slashes rates as markets crash”. Slashes? Crashes? Like, the Bank of Canada suddenly, unexpectedly dropped the prime lending rate by a full percent? Like, my RRSP mutual funds have tanked? Um, no, turns out the Bank of Canada cut the rate by the usual increment when they change the rate up or down—a quarter of 1%. Oh, so that’s a “slash”? OK, so the USA cut their rate by .75. That is approaching “slasher” territory in my view. But a cautious .25 is barely newsworthy, let alone justifies the worrisome headline. As for the crash, well, the main Canadian index was actually up today, but whatever.

Are we really so saturated with information that a simple .25 cut story needs to be presented as a five-alarm fire? Well, not everyone reported it that way. In fact, for some BC pundits, it was almost good news.

Now, I don’t know how I can explain this without sounding like a flake; maybe I’ll just have to sound like a flake. But here it is—if we all believe the markets are going to crash and economic woe is heading our way like a runaway train, well, guess what—that’s what we’ll get. I am not advocating ignoring financial realities, of course, but I am saying we need to think for ourselves and dig a little deeper, because if we just read the first slash and crash article and took it at face value, we’d probably be looking for some rope and an exposed rafter right about now. If we all believe that we can muddle through together and find ways to create a sustainable future, I think that’s exactly what will happen. We can choose what we want to focus on, if we can just filter the media hype down a couple of levels.

Is the US economy in trouble? Depends who you ask; sort of like climate change, in that respect. My view, based on my financial experience as someone who has a mortgage and knows how to balance a chequebook, is that you can’t take on huge debt, run a deficit, and keep spending money, forever. You just can’t. The people you borrow the money from are eventually going to say no more. Let’s just say whoever wins the presidency in November is going to need more than a few energy-efficient light bulbs in the White House to find some black ink on the national balance sheet.