Wednesday, February 20, 2019


Historically, we’ve had a market correction (A.K.A Recession) every 10 years or so with the last one being in 2008. We’re overdue for one - so where is it?

One of the problem with recession prediction is that there’s a new one made every year. This suggest that while it is possible to identify patterns with the economy, predicting its future with any sort of certainty is a little bit like trying to predict the weather - anything can change at a moment's notice. What is true today is not necessarily true tomorrow.
Our economy is global and every single person is contributing to it. There are markets created and dying every day.

There are, however, signs that may suggest that a recession is at our doorsteps. Those are:
  • We're over due for one - The economy isn't perfect because those that affect it are not perfect. Historically, there's been one every 10 years or so and it's been 11 years since our last big one in 2008. We're overdue for a correction - this is not only to be expected but a natural process of this imperfect economy.
  • America’s Tarifs - The tarifs are creating uncertainty throughout the world.
  • House Sales are down - The cause of the last recession was largely due to the housing markets. There are signs that it's heading in the same direction as it did in 2008.
  • The unemployment rate is at a all time low - How can this possibility signal that a recession is coming? There's always a calm before the storm. The employment rate is about the same as they were in the 2008's recession.
  • Global Warming - What does the actual weather have to do with the economy? Businesses can't run when everything around it is either burning, flooding or getting destroyed by strong wind. For the economy to run, you need people at work and buy things.
  • Going Out of Business - Big companies, such as Toys R Us, Sears, Payless Shoes... have closed down their doors in the last few years.
While no 2 recessions are alike, you do not need to be an economist to be able to identify patterns.
A recession is not always a bad thing either, there are a lot of money moving around during those times and some of that can land in your pockets if you know what you're doing.

No comments:

Post a Comment

Back to Top