You’ve gotta love Americans. Leading up to Y2K, gun sales and bomb shelters were through the roof. After 9/11 we were buying parachutes for jumping out of buildings. When it was evident Obama would win the election, gun sales skyrocketed over fears the government would begin confiscating guns. Californians have cleared the shelves of Iodine pills. Now “doomsday shelter” sales are skyrocketing again in the wake of the Middle East uprisings and the Japan nuclear disaster as reported by CNN. Call it a tepid recovery, but in the bomb shelter business, things couldn’t be better! Every so often, we find a reason to rush out and buy either guns or bottled water or bomb shelters or duct tape. This is the illogical and eternally frustrating recency effect at work.
Recency Effect – Illogical, Irrational, and Terribly Annoying
It annoys me to no end when people I know, or as reported by the news, act completely irrationally (and waste money) on stuff they don’t need solely because of a recent event. No matter how remote the possibility of recurrence, when some exogenous event occurs, they stock up as if it’s about to happen in a neighborhood near them. When there’s an airline crash, people are afraid to drive – yet they’ll drive around like idiots in automobiles, which statistically, are much more likely to kill them.
- Here’s a hilariously paranoid website for people who can buy basically a doomsday timeshare (get yours now! $25,000 while supplies last!) . The video cracks me up – nuclear blast detectors and all.
- This latest Japan earthquake and tsunami 1-2 punch that put the reactors in jeopardy is so unlikely to occur here that I don’t even give it a second thought. Some say, “well, this nuclear facility is in a seismic area”. OK, but a contributing factor to the current situation in Japan is that a massive wave came and wiped away the backup generators that should have and would have been keeping the cooling towers running. So, is the thinking that somewhere 50 miles inland we’re going to have a massive tsunami come through as well? Reactors in the US are built with so many redundant systems (and it’s the American experts Japan finally allowed in to help assist in the shutdown of the reactor that would be overseeing a crisis in the US) and protocols that the likelihood of a serious release near you in your lifetime is much lower than risks you don’t even contemplate that ARE real.
- Then, there’s the hysteria about people buying gold. I get that gold has been trending up and if you think the currency’s going to continue to be devalued then gold continues to run due to notion that you can’t print more gold like you can print more dollars. But buying gold as a replacement currency in the event of a global cataclysm? (Many people believe in this stuff). Seriously? In the event the world descends into chaos, guns and bullets are going to be a heck of a lot more useful than gold – and that assumes you’d even want to go on living (ever see “The Road”?).
So, Americans, and others I suppose, tend to freak out about the latest crisis until something new rolls around and then it’s time to freak out about something else irrationally. All this hysteria results in an inefficient deployment of capital, personal savings, time and effort.
What Do You Think? Have You Started Building Your Shelter Yet?
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