Tuesday, December 9, 2008

Are you fueling the recession?

If you pick up a paper or watch the news you might think it's economic armageddon. Each day talk of losses in the market, bailouts and handouts all over. The word recession is thrown around like candy.

60-70% of GDP is consumer spending. There are some hurting sectors with people out of work. However, there are many, Many people with stable jobs who are hoarding cash waiting for the pending apocalypse. This is only going to fuel the recession

Let's keep it in perspective. The Bank Rate is now at 50 year lows meaning anyone on a variable rate mortgage has a lot of extra money in their account, or is paying down extra principle. Gas prices have also had a massive decline, filling up that big SUV isn't so painful anymore. Yes everyone's investments are down but with great fear brings great opportunity.

The market and to an extension the economy is built on consumer sentiment. Confidence in the market and the confidence to spend money is crucial. So give it some thought, if your in a fairly secure sector, if you feel safe in your job then Do Your Part. Spend some money!


Dave said...

I think Warren Buffet once said "be fearful when others are greedy and be greedy when others are fearful"

Curmudgeon-at-Large said...

For a different point of view (a wider one in my opinion) see the latest posting on my blog.