Today, the National Bureau of Economic Research (NBER), announced that the United States economy has officially entered recession. The monthly peak occurred in February 2020, while the quarterly peak occurred in Q4 2019. They noted that this was the longest business cycle expansion in US history, lasting 128 months. It surpassed the previous record of 120 months that was set from March 1991 to March 2001. Records go back to 1854.
This should come as no surprise to this audience, or anyone paying attention to what has been going on – especially as it relates to the pandemic of COVID-19. However, as we have be saying here at The Kapital News for some time, the fundamentals of the economy were starting to crack throughout late 2018 and 2019. We posit that even without a global pandemic, 2020 was likely to be the year that a recession would be officially scored. Check out our videos on this topic.
It must also be understood that recessions are an opportunity for businesses and individuals to strengthen their balance sheets. To deleverage. To save. And to invest prudently for the longer-term. Also, during these times, weaker companies are to go through bankruptcy, potentially emerge leaner and stronger, or perhaps go out of business and liquidate. While this may be a painful experience for these respective companies and their employees and other stakeholders, it is nevertheless the right course of action – stronger companies need to survive and thrive, and weaker companies need to cease operations. This natural ebb and flow of the business cycle is a healthy process and should result with better outcomes for businesses, governments, employees, and consumers. Unfortunately, what we’re witnessing is an attempt by policymakers (government and central banks), to keep everything “afloat.” This will prove disastrous is due course.
Recessions and even depressions, are corrections – and corrections are healthy – despite how painful they might be. However, that pain can be quick or it can be prolonged. Given the policies thus far enacted and those likely to come are likely to turn this now official recession into another depression – perhaps the Greatest Depression. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #Depression #NBER #USA #Gold #Peace #Debt #Bailouts #Protests #Jobs #EndTheFed