winningkarma

Finding your feet..

In Uncategorized on October 20, 2009 at 4:03 pm

Finding your feet…

Established family businesses being shuttered; banks being bailed out by the Government; housing market slumps. Doom and gloom-the end is nigh!

Well, that pretty much sums up all that we hear and see right now. The once robust American economy has tanked and we are facing the next depression. Well, as somebody once said when America catches a cold the whole world sneezes and so right now the entire world is nursing a cold.

As promised friends, we will focus on a series of articles centered on the recession and give tips on what to do and NOT to do. Okay, so now to cast my mind back to my Economics training, and no i did not study with Adam Smith!

There is an old joke among economists that states:

A recession is when your neighbor loses his job.

A depression is when you lose your job.

Recession: We look at changes in business activity output looking at real income, employment, production and wholesale retail sales. Whenever activity peaks it is followed by a “bottoming-out”-a trough- a  period where it slowly declines and once it rises again this is called the expansionary phase.

Depression: the last was in the 1930’s (and no i wasn’t around ha!) when Gross Domestic Product (GDP) dropped by more than 30% (anything more than 10% is defined as a depression);unemployment peaked at 33%. a depression is mor prolonged.

Let me just say to counter those who say that we are in a depression-we are categorically NOT. Lessons were learned during the great depression so that  history would not repeat itself.

So, first step in these dire times is to understand that we are NOT in a depression-write it, put it on a post-note, etch it in your minds-whatever you need to do, but start off with that thought in mind. Hard as it maybe to believe but as we shall see during this series of articles, good things can come from a recession.

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