What is a Recession?

A note from: peter@thewealthyattitude.com

What is a Recession?

It doesn't matter whether you want to face up to it or not, this continent is going to be fully in recession pretty soon. Many pundits declare that it is foolish to think that we are not there now, and that we should be taking all steps to safeguard ourselves in every way possible.

Still, many folks with continue blithely along as if some great sweeping hand will emerge from the wild blue wonder and save their financial butt. Trust me, I've been through two recessions, and it ain't going to happen.

Like it or not folks, it's time to really evaluate your position, and take all of the necessary steps to make sure you are able to traverse the coming financial adjustments. And maybe even come out ahead.

Two books that are worth adding to your "required" reading are:

1. Crash proof by Peter Schiff ISBN 978-0-470-04360-8

2. Conquer the Crash by Robert Prechter Jr ISBN 978-0-470-87090-7

So, what is a recession? Without going in to quantum economic analysis, an article that appeared in the Guardian newspaper in January sums it up in one of the best way I've seen. Those of you who are old enough to remember, or have chosen to forget, will be reminded. Those of you too young to know, should pay attention.

This is what a recession looks like!

Wednesday January 23,

2008The Guardian

World markets plunge! Newspapers full of down-pointing graphs and City traders with their heads in their hands. Some of us have been here before, specifically from 1989 to 1992, but for those who are in their 20s and unsure of what to expect, here's a beginner's guide to recession ...

Those weekly shopping sessions will seem like a distant memory, and the merits or otherwise of organic food will suddenly appear less pressing. The empty shop on your high street will no longer be automatically taken over by bouffant-haired real estate agents who install a latte-making machine and a 6ft-wide TV as a matter of priority. Instead, nothing will happen to it.

That voice on your cell phone answering machine that says, "You have ... no new messages" will begin to sound rather sadistic, and your boss will suddenly seem less like David Brent, and more like the angel of death. You won't know where he'll strike next with the fatal words, "Could you just step into my office, I'd like a quick word ..."

Pop-ups won't pop-up so often; newspapers will become thinner. The "50 different ways to brighten up your garden this spring" by a star horticulturalist will become a small article on daffodils written by a subeditor. Your property begins to seem less like a lifeboat and more like a millstone, and a lot of chickens come home to roost. That buddy of yours who played guitar in a band - but not very well - suddenly takes up teacher training.

On the brighter side, though, you will no longer be welcomed into people's houses with the dreaded words, "Do you want the guided tour?", and if you are, you can simply ask, "And how much less is it worth now than when you bought it?"

In a recession, it won't be the people who have got the latest "must-have" gadget who do all the talking. Rather, people who know about root vegetables will come into their own; people who know what to do with a scrag end of lamb or how to fix a broken toaster. Triumphalism will be quelled. Interviewers might cut Victoria Beckham off when she starts talking about the latest additions to her wardrobe, and ask instead whether she leaves the bath water in for David.

Recessions encourage imaginative business ideas, novel-reading, cinema-going, and foster music more akin to the blues than the stridency of Madonna. The last one gave us Wagamama, loft living and Every Day is Like Sunday by Morrissey. Fear not, kids. You have nothing to lose but your credit cards.

Today take "proofing" steps. You'll be glad you started.