Recession or even depression?
October 8, 2008 on 10:30 am | In Debt Management
In my last blog instalment I mentioned recession. Now it appears that everyone agrees that the recession will hit but now they are trying to anticipate how bad it will be. Economists won’t get it wrong but will it be the ‘storm of the century’?
The last super recession, or depression was following the 1929 Wall Street crash. That crash caused a global financial crisis which came from toxic debt which could not be repaid. The similarities between the Great Depression and the last three weeks are obvious; failure of banks, debts in excess of assets and government bail outs etc.
In the Great Depression hard times started in the early 1930s and for some went into the 1950s, following a World War. I don’t think that this recession will be as bad as the 1930s one but it is going to be very bad.
Our economy has been fuelled on credit as do most modem economies and the credit crunch has stopped that, effectively cutting the life force of the economy. It is only the ‘emerging’ economies, such as India and China that will stop a global recession.
I do think that this recession will be worse than that of the most recent recession in the 1990s which saw two years of a shrinking economy, a doubling in unemployment, a fall of more than a third in house prices and the failure of tens of thousands of businesses. This is what’s coming and if this is going to hit you because you have unmanageable debt or perhaps you need to restructure your finances, give Simple Debt Solutions a call.
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