Recession?
- Thread starter AceHBK
- Start date
It's not a straightforward subject to discuss briefly but recessions are largely avoidable events and are exacerbations of the normal slow-seven-year-wave that ripples through the global economy.
Why they occur is a subject of some debate and tho' there is some doubt about intentions, it is true that the financial institutions play an active role in them for good or ill.
As a private individual of limited means, there is not a lot you can do to 'protect' yourself as the only sure fire way of riding out a recession is to be sitting on a wad of wealth of some description. If you're in work, then have a look at how 'viable' the company you work for is and how important your role within it is. If you have the option to move to a company you consider to be more solidly grounded then it may be worth a pre-emptive move.
Frugality in living within your means and not committing to credit are also good insulators from recession. If you are used to spending within your budget then shrinking that budget whilst still retaining your lifestyle is doable in the short term at least. For example, the only debt I have is my mortgage and that could inflate quite a bit, as a response to interest rate changes, before I couldn't afford to pay it. That gives you quite a good bit of piece of mind - as long as you don't worry about what would happen if you lost your job
!
Why they occur is a subject of some debate and tho' there is some doubt about intentions, it is true that the financial institutions play an active role in them for good or ill.
As a private individual of limited means, there is not a lot you can do to 'protect' yourself as the only sure fire way of riding out a recession is to be sitting on a wad of wealth of some description. If you're in work, then have a look at how 'viable' the company you work for is and how important your role within it is. If you have the option to move to a company you consider to be more solidly grounded then it may be worth a pre-emptive move.
Frugality in living within your means and not committing to credit are also good insulators from recession. If you are used to spending within your budget then shrinking that budget whilst still retaining your lifestyle is doable in the short term at least. For example, the only debt I have is my mortgage and that could inflate quite a bit, as a response to interest rate changes, before I couldn't afford to pay it. That gives you quite a good bit of piece of mind - as long as you don't worry about what would happen if you lost your job
!
Big Don
Sr. Grandmaster
Slower growth is not a recession a recession is NEGATIVE growth.
Incidentally, Bill Clinton thinks slowing down the economy would be a good thing!
Incidentally, Bill Clinton thinks slowing down the economy would be a good thing!
Quite so, Don. If the Doom-and-Gloomers in the media are dressing up a lower rate of growth as a disaster then they need a good slapping.
That sort of defeatist and alarmist talk is the sort of irrational impetous that the soap-bubble of the stock markets reacts to - daft as it sounds.
That sort of defeatist and alarmist talk is the sort of irrational impetous that the soap-bubble of the stock markets reacts to - daft as it sounds.
OP
OP
AceHBK
Master Black Belt
I guess at only being 30 I really have never had to worry about the impact of a recession on me. I guess now with a kid and a new job and all I have started to take more of a notice on things and want to be more aware of what goes on and the impact that it will potential have on me.
OP
OP
AceHBK
Master Black Belt
See, that is what I hear now constantly in the media. "There is a low rate of growth, the recession is about to hit, yada yada yada."
michaeledward
Grandmaster
In the past seven or eight days, the Federal Reserve lowered the overnight interest rate for banks by one and one quarter percent. This is the largest, fastest drop ever.
It is hoped that this will cause those among us who are broke, to borrow more money, and spend our way out of the spell we are in.
Regardless of what is hoped .... lowering the interest rate will cause investments to seek out higher interest rates. European banks have not lowered their interest rates. So, expect overseas investors to start shifting their investments to Euros. This will further push down the value of the dollar.
So, even if we borrow and spend, we aren't going to be able buy as much with what we spend.
Oh, Joy.
It is hoped that this will cause those among us who are broke, to borrow more money, and spend our way out of the spell we are in.
Regardless of what is hoped .... lowering the interest rate will cause investments to seek out higher interest rates. European banks have not lowered their interest rates. So, expect overseas investors to start shifting their investments to Euros. This will further push down the value of the dollar.
So, even if we borrow and spend, we aren't going to be able buy as much with what we spend.
Oh, Joy.
Flying Crane
Sr. Grandmaster
well, I had given up all hope years ago of ever owning a home in the San Francisco area, because the housing economy has been so insanely out of control.
With the housing market around here starting to crash, we are beginning to see prices that are almost "reasonable", at least by San Francisco standards. We are starting to re-evaluate our options of owning a home. Our jobs seem secure, we have a bit of savings, and we hold no other debt. We are cautiously optimistic...
With the housing market around here starting to crash, we are beginning to see prices that are almost "reasonable", at least by San Francisco standards. We are starting to re-evaluate our options of owning a home. Our jobs seem secure, we have a bit of savings, and we hold no other debt. We are cautiously optimistic...
OP
OP
AceHBK
Master Black Belt
I have watched a lot of home shows and have seen the prices of homes out there is it is a downright shame how much houses cost in California. The prices alone of homes out there has deterred me from ever living out there.
It won't impact the relative price of American products, and it gives American products a better overseas market. Look at Boeing, the relative price of the Boeing products has dropped 60 percent or so over the past five years versus the Airbus products, based on currency differential alone. Where do you think buyers will be going?
Buying oil from overseas will suck, but should provide incentive for alternate technologies or simply increased frugality. Not necessarily a bad thing.
Lamont
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