Global Recession

Fears are growing about a global recession..We’ve all heard of the recently announced $700 billion bank bail out package in America, and similar moves have followed in United Kingdom, in order to prevent a financial disaster following world banks massive shortfall in loan repayments. Last October, the DJ Industrial average was at it’s all time high, this October it has risen only one day so far, and it’s now the 16th of the month, as Wall Street has finally got the message it’s economy is in serious trouble. But how did this happen in the first place…..

For years we have had the so called “Goldilocks economy”, low inflation, good growth, house prices gaining, low unemployment. Now, all those indicators have reversed, and we are looking at the flip side. Inflation has surged for over a year now, but stock markets chose to ignore it. Oil spiked to $147 a barrel, with some predicting $200 by this year end. Gas and electricity have reached ruinous levels, all of which is crippling the consumer. And now, in recent months, Wall Street is in it’s “the world is coming to an end” mood, with global markets following their leader. But is there any light at the end of the tunnel?

Obviously, the collapse of the housing market is a disaster to many, except that is for first time buyers who have been priced out of the market for years. Good news for first time buyers? They still need a mortgage, unless that is, house prices fall to levels where they don’t need one! So, let’s examine possible glimmers of light, by focusing on the bull points;

Bush is leaving
Oil prices have plummeted
Commodities have slumped
Banks have massive shake up

The president of America, whose slack monetary policies have led to far too many risky lending by banks, is outgoing. It surely can’t come soon enough, as he will go down in history as the president who inherited a reletively healthy economy, and seen it turn to dust.

For over a year, gas, petrol, and electricity have crippled the consumer, as suppliers felt confident enough to write their own cheques. A massive correction in this inflated commodity market was long over due. As a former stock market trader, if I learned one thing it’s that when there is too clear a distinction between valuation and fundamentals, serious trouble is close at hand. The price of oil clearly was not supported by fundamentals, everyone knew that, now it’s crashed. As did the technology heavy index the Nasdaq in 2000. It has never since come close to it’s March 2000 peak. Like the old saying, “no tree grows to the sky”….

Finally, banks. Many have lost their jobs, others have lost jobs they never should have had in the first place. It’s now far harder to obtain loans, bad news for people who want to better their lives and homes, good news in preventing scammers intent on running up debts they will never repay.

As for looking for any signs of recovery, word on the street suggests, as the credit markets started this rout, look for any signs that lending is on the increase. Goverments have provided liquidity to the markets, but liquidity is not capital. If you buy equities, be vigilent for any sign that the credit markets are easing up. Remember, we won’t know if we’ve hit bottom until we are well past it, so if you are a buyer of anything financial, your timing will be dependent on your risk aversion policy.

So, there are the bad points, and the not so bad points. Good points? You can make your own mind up whether there are any….After the infamous market crash of ’29 we had the depression of the 30′s. Which most today cannot imagine the likes of. With the biggest danger in all this surely recession, higher unemployment, is there anything we can do to protect ourselves?

Obviously, we cannot control world fiscal policy. But it makes sense where possible to open as many income streams as we can for ourselves. Do your own research on makeing money on line. And I’ll be passing on ways of making internet marketing work, as well as exposing scams. I’m not going to pretend I have all the answers, any blogger, no matter how successful, who pretends he is above all this and immune to global collapse is living in cloud cuckoo land, this affects everyone, bar none. But one thing about blogging…We are a community, so stick together and find ways to help each other. The point being, we learn together. That is why I started this blog. To embark on the internet marketing voyage myself, and for others to join with me. As this site is new, I can chart my progress along the way, having previous experience of writing blogs I am now starting afresh to demonstrate my way of developing a website. As a writer, I’d be more than happy if anything I write makes people feel better for having read it. If that’s to be my personal contribution to the current crisis, I will consider it worthwhile