ARE YOU READY FOR THE NEXT RECESSION?

Introduction:

It will be naive to believe the recession caused by the
collapse of Lehman Brothers in 2008 is the last
recession we are ever going to face. The following
statistics may wake you up to prepare you for the next
one coming which, I believe, is just around the corner.
A country is officially declared in recession when it
goes through two quarters of negative growth. Last
month, August 2011, these are the GDP for the
following countries and they all do not look good.

1. USA = 0.8%
2. Japan = 0.5%
3. Germany = 0.1%
4. France = 0%

From 1930 to 2008, we have seen a total of 18
recessions. The only scary thing is there is a
possibility that we may see a very serious recession
similar to the Great Depression. Let us pray that this
does not happen.

USA AND GLOBAL RECESSIONS.

1. Great Depression (1929 to late 1930s), stock market
crashed, banking system collapsed in the United States
which sparked a global downturn, including a second
but not heavy downturn in the U.S., the Recession of
1937. Durations: 43 and 13 months respectively.

2. Recession of (1945) Duration: 8 months

3. Recession of (1948 1949) Duration: 11 months

4. Post-Korean War Recession (1953 1954) The
Recession of 1953 was a demand-driven recession due
to poor government policies and high interest rates.
Duration: 10 months

5. Recession of (1957 1958) Duration: 8 months

6. Recession of (1960 1961) Duration: 10 months

7. Bond Inversion of (1965 1967) no recession
materialized

8. Recession of (1969 1970) Duration: 11 months

9. 1973 oil crisis (1973 1975) a quadrupling of oil
prices by OPEC coupled with high government
spending due to the Vietnam War leads to stagflation in
the United States. Duration: 16 months

10. 1979 energy crisis 1979 until 1980, the Iranian
Revolution sharply increased the price of oil

11. Recession of (1981 1982) Duration: 16 months

12. 1982 and 1983, was caused by tight monetary policy
in the U.S. to control inflation and sharp correction to
the overproduction of the previous decade which had
been masked by inflation

13. Great Commodities Depression 1980 to 2000,
general recession in commodity prices

14. 1988 to 1992, collapse of junk bonds and a sharp
stock crash in the United States which lead to a
recession in much of the West

15. Japanese recession 1991 to present, collapse of
the real estate bubble and more fundamental problems
that halted Japans once astronomical growth

16. Asian financial crisis 1997, a collapse of the Thai
currency inflicted damage on many of the economies
of Asia

17. 2001 to 2003: the collapse of the Dot Com Bubble,
September 11th attacks and accounting scandals
contribute to a relatively mild contraction in the North
American economy.

18. Lehman Brothers 2008

My observations when I studied the above recessions:

1. Many of them lasted only for several months (except
the Great Depression)
2. Some recessions only affect certain countries
3. Some recessions only affect certain industries.
4. Interest rates were high then.
5. Two recessions were caused by the price of oil.

We were able to solve several recessions by reducing
interest rates or ask OPEC to reduce the price of oil.
The Asian crisis affected some Asian countries but not
so much the Western world and Europe. Actually the
recession caused by the collapse of Lehman Brothers
did not affect many countries in Asia. The Dot Com
Bubble did not affect other industries.

Todays scenario is different. Interest rate is near zero
and many countries are running their country at
unsustainable budget deficits. USA has already
exceeded their debt ceiling of USD14 trillion and on
August 2, 2011, USA has increased it to USD16 trillion
or she would have to default on her obligations. Her
current annual budget deficit exceeds USD1 trillion.
When is the bubble going to burst? We may go into a
global recession caused by some countries going into
bankruptcy.

Conclusion:

Networkers, are you ready for this disaster? My advice
is you must decide to work 12 hours a day 6 days a
week after you read this report. Do not dig your well
only when you need to drink. Dig your well now.

Eddy Chai.
Founder and CEO.
Diamond Lifestyle Corporation.
Website:http://www.eddychai.com
Website Chinese: http://www.dlcorp.com
Website English:
http://www.diamondlifestylecorporation.com
Twitter: http://twitter.com/eddychai
Email: eddy@dlcorp.com
Facebook: Edward Chai

Thanks to all the leaders who wrote articles in the Internet.
Without their input, this article will not be possible.