Money Matters. The Recession. A Prediction.

Good day Peeps,

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Now, before I start my Blog today I must confess that maths is not my strong point.  I can manage it, but gives me a headache and it makes me feel stressed.

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However, I have been doing some research lately and I was quite surprised by the results I found.

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I have always noticed that there is a problem with house prices every thirteen years or so.

I had no chance of not seeing this rhythm because I have been through the bursts of rapidly rising house prices along with the periods of negative equity.

Previously, I always knew that if you can manage to stay in the housing market, and hold on to what you have then eventually prices begin to rise again and things go back to normal.

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What I never realised was that the same thing happens with the money markets.

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I was thinking about the present global depression which was begun in America with the sub prime lending by the banks.

Then I thought that it was a similar thing to The Great Depression in the 1930’s, which was caused by the Stock Market Crash. This of course leading in turn to an even wider recession when the resulting shock-waves reached out to cross  the whole world.

This lasted from 1929 until the 1940’s at the latest, but in some areas recovery took place in the 1930’s.

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This led me check stuff out through sheer curiosity.

And guess what I found?

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Forty years BEFORE The Great Depression we had The Panic of 1893.

This was one of the worst economic depressions in American history.

There was mass unemployment, with millions of people who could not find work.

Banks were closing by the thousand.and once again this uncertain period was started by a financial panic.

I believe that the unemployment did not recede below 10% for about 5 years.

The initial period of uncertainty and recession began in early 1893 and lasted for almost 18 months.  There then appeared to be a recovery which lasted about 18 months.

Unfortunately, at that point, a second recession began, which then lasted for about a further 18 months.

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Many experts blamed this 1893 recession upon the many factors existing since the American Civil War, after which construction, railways and manufacturing boomed.

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Then,  I found that about forty years AFTER  The Great Depression there was a 1970’s depression in America which was named The Great Stagflation.

This word was coined by the joining of the words ‘stagnation’ and ‘inflation’.  Basically, if  there is continuous inflation, increasing unemployment, stagnant business and production, then there is a problem.

This crisis was started by the rising price of oil, which meant that prices  began to rise within a country that needed to continue to import the now more costly oil.

Because of this new expense in the cost of manufacturing etc., the resulting production was nowhere near as  profitable as it formerly was.

After The Stagflation began, it was worsened by the central banks’ decision to excessively stimulate monetary policy.

They did this to try and stop the recession but it did not work .  The wage-work balance was then pushed into an uncontrollable spiral.

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So think about it now.

1893

1930

1970

2009

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So, by my reckoning, I will make a prediction!

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In approximately 2049 ………. WE WILL HAVE ANOTHER CYCLICAL DEPRESSION.

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So, what do you think of that?

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LOL

J.

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