The Great Recession
A downturn of truly epic proportions occurs about once a lifetime. In modern history, this is around every 80 years. In the 19th century, it was around every 60 or so years, due to generally lower life expectancies then. It seems that it happens when all those around us who could advise us (and especially the banks!) not to take out huge amounts of credit are dead, we are convinced that we live in a new world with all our technological advancements and that our forefathers who just live on in photos cannot possibly understand the nuances and complexities of the modern world, as we are so sophisticated and they were so primitive. In the 1920s, they too lived in a whole new world with the mass availability of electricity, cars and telephones. It was the “roaring 20s” with the economy roaring ahead. The U.S. President stated that we have “perpetual prosperity”, somewhat similar to Gordon Brown “abolishing boom and bust" in the global economy in painfully recent memory! If you hear a politician utter similar statements in decades to come, run for the hills!
I study economics, so I have a fair idea of what is to come. Harry S. Dent, who is my favourite economist, predicts a second recession lasting until around 2015, then slow growth until the early 2020s. The next boom, as was the “normal” economy we were accustomed to, will happen in the 2020s. All these years of poor economic performance will then be ignored by our children and their children who, of course, will not be remotely interested in the ancient experiences of us old fuddy duddies from a bygone age, convinced that everything is different for them in 2080! How could a person in 2080 whose flat is going up from £2,000,000 to £3,000,000 heed the warnings from history? Everyone is buying..all the banks have relaxed their lending and billions and billions are flowing…as the boom will last forever, it is all totally safe…!!! (and on and on, as it repeats itself again and again!!)
With my daughter born in 2004 and my next baby due in 2012, they can thank the stars that they have avoided this downturn and will be old when the next one happens. I mentioned this to my father recently, that due to being born in the 1930s, he had avoided both of the great recessions, as a small child and later in his life. He just smiled!
With my daughter born in 2004 and my next baby due in 2012, they can thank the stars that they have avoided this downturn and will be old when the next one happens. I mentioned this to my father recently, that due to being born in the 1930s, he had avoided both of the great recessions, as a small child and later in his life. He just smiled!
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