Posted By Nick Nicolino on September 24, 2010
Ok, I’ve been watching this for a while, but there seems to be some confusion on the “is the recession over” question and I’ve yet to hear it explained correctly. First, economic information comes mainly from economists. Most of there geniuses never ran a business or have any hands on experience. They look at charts, graphs and words. They measure only “Expansion” and “Contraction”. If people are buying and causing a slight bit of inflation.. the economy is ‘expanding’. That’s the ideal situation. If people aren’t buying and prices are going down.. that’s deflation. Nice in the short run.. things cost less. Not good in the long run. People will continue to wait and cause everything to log jam.
Now, how is it that we are in the ‘deflation’ mode, but yet they are saying the ‘recession is over.
Here’s the explanation. Look at the economy as a sports game. It’s the people vs. the economy. A few years ago, the people were winning.. we were way ahead of the economy. But they things changed, and the economy started kicking our ass. If the score was 120 – 100,, we are now economy 100, people 50. Now, in an economists eyes, if we gain back 5 points, we are ‘expanding’. Now, mind you, we are still down 45 points, don’t stand a chance of winning, but we are just not losing by as much. But we will lose.
The truth is, we are no where out the the hole. There are more foreclosures now then when this began… and there is more coming.