Is It Time to Take the Coming Recession Seriously?
For some reason, there's no consensus that a recession is coming. Even in the trades I skim each week, there seems to be a fear of just stating the obvious: A recession is coming.
This isn't rocket science. The way the economy works, especially since the advent of the Fed, recessions come on a regular basis. And based on past history, we're overdue. Of course, timing - as always - isn't set in stone. Maybe the reluctance to just accept the coming of recession is based on the fact that no one can know for sure when?
But even if we can't know the timing for sure, does that mean we're supposed to think it could be years before the next recession? It's possible some people believe this. Do you? I don't. Even with the central banks seeming perfection of the art of kicking the can down the road, it's just hard to conceive that they can keep doing this forever - although they've tried awfully hard for over a couple of decades now.
The view that Alan Greenspan and his famous "Greenspan Put" kicked off a new regimen of can-kicking theretofore (Is that a word?) unknown and unheard of seems hard to dismiss. While central banks have historically been called upon to assist the banking system, and with that the economy, remain at least somewhat intact in the face of ecnomic distress, what's gone on since Greenspan has taken that art (if you can call it that) to a whole new level. It does appear that since Greenspan, with each recession, there's never a clearing out our cleaning out of the economy and financial markets to allow a fresh start. The patient has been rescued from the brink of death only to be sent out of critical care hardly better than when he arrived.
The last recession - the Great one - seems a clear example. Despite the extraordinary measures taken, there's never been a real jump start and subsequent healthy run for the roses on the part of not only the American economy, but any of the world's economies. Things have been sort of stumbling along, but it's been more the stride of a guy who's had a few too many. I think they would have been happy with the steady jog of a weekend warrior, but that turned out to be asking too much.
But timing aside, if a recession's coming, shouldn't we all be preparing for it. You don't really see much about that. Shouldn't we be thinking something along the lines of what people do when they know a hurricane's on the way? If you see it might hit, you don't just turn off the weather report and go back to your latest Netflix binge, do you? (Maybe you do.)
Maybe think of it like this: Prudent people who live in parts of the country that are subject to extreme weather events like tornadoes or hurricanes already have some idea of what they'll do when one strikes. If your house or business is in a vulnerable area of Florida, and there's a hurricane that looks like it's got you in its sites, maybe you board up the windows, maybe you've got emergency supplies and gear already socked away, maybe you grab some extra food and water, if you don't think you've got enough, maybe you decide to skedaddle with the family, the pets and whatever you need to take to keep you safe.
Or you could just press play, listen to Jimmy Buffest's "Margaritaville" and get buzzed.
For a recession, there's stuff you should already have in place. Maybe there's some additional things you can do now. But shouldn't we all be planning on one coming?
This isn't rocket science. The way the economy works, especially since the advent of the Fed, recessions come on a regular basis. And based on past history, we're overdue. Of course, timing - as always - isn't set in stone. Maybe the reluctance to just accept the coming of recession is based on the fact that no one can know for sure when?
But even if we can't know the timing for sure, does that mean we're supposed to think it could be years before the next recession? It's possible some people believe this. Do you? I don't. Even with the central banks seeming perfection of the art of kicking the can down the road, it's just hard to conceive that they can keep doing this forever - although they've tried awfully hard for over a couple of decades now.
The view that Alan Greenspan and his famous "Greenspan Put" kicked off a new regimen of can-kicking theretofore (Is that a word?) unknown and unheard of seems hard to dismiss. While central banks have historically been called upon to assist the banking system, and with that the economy, remain at least somewhat intact in the face of ecnomic distress, what's gone on since Greenspan has taken that art (if you can call it that) to a whole new level. It does appear that since Greenspan, with each recession, there's never a clearing out our cleaning out of the economy and financial markets to allow a fresh start. The patient has been rescued from the brink of death only to be sent out of critical care hardly better than when he arrived.
The last recession - the Great one - seems a clear example. Despite the extraordinary measures taken, there's never been a real jump start and subsequent healthy run for the roses on the part of not only the American economy, but any of the world's economies. Things have been sort of stumbling along, but it's been more the stride of a guy who's had a few too many. I think they would have been happy with the steady jog of a weekend warrior, but that turned out to be asking too much.
But timing aside, if a recession's coming, shouldn't we all be preparing for it. You don't really see much about that. Shouldn't we be thinking something along the lines of what people do when they know a hurricane's on the way? If you see it might hit, you don't just turn off the weather report and go back to your latest Netflix binge, do you? (Maybe you do.)
Maybe think of it like this: Prudent people who live in parts of the country that are subject to extreme weather events like tornadoes or hurricanes already have some idea of what they'll do when one strikes. If your house or business is in a vulnerable area of Florida, and there's a hurricane that looks like it's got you in its sites, maybe you board up the windows, maybe you've got emergency supplies and gear already socked away, maybe you grab some extra food and water, if you don't think you've got enough, maybe you decide to skedaddle with the family, the pets and whatever you need to take to keep you safe.
Or you could just press play, listen to Jimmy Buffest's "Margaritaville" and get buzzed.
For a recession, there's stuff you should already have in place. Maybe there's some additional things you can do now. But shouldn't we all be planning on one coming?
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