| US recession might be an overstatement. In the last 4 months many stocks just doubled in value. This was even more so with the Chinese. Now there appears to have been a lot of speculation in the last few days on the Chinese stock market. This also results in a significant amount of people choosing money over stocks.
I would state that we have just seen a correction of the stock values. There was too much optimism and euforia on as good as all the stockmarkets globally. An increasing amount of people were fearing a collapse, which has happened before when there was a lot of profit on the stockmarket.
I actually think this is a good thing, if it took a while longer it might have been worse. And I'd say now it's a good time to buy some stocks. Maybe wait for next week, but then make a move. I did lose some money but not all that much. Certainly not when compared to 2003 when I bought in. Compared to that I still have quite a large profit. Pretty small scale but it's all relative of course.
We were already moving towards recession before 9/11 and I think we were getting back up since late 2004. Having a recession now would be totally going against the timeframe in which these kind of things happen. Normally a cycle that completes a recession from the beginning, till the point where it is completely over occurs in 11 years. This has been the case dating back from before WW2.
Getting out of a recession always goes with ups and downs, which counts for every economic situation anyway. Till last week we hadn't seen one of those "downs" yet. So it was bound to happen.
Don't worry. I think we're okay for some years to come. Unless some global event would all of the sudden happen.
An important thing the US government and federal reserve need to worry about is the federal deficit. A lot of the deficit is being paid for with Chinese money to even the equation. It's just like a regular debt. And you need to pay for the debt. More debt is more expensive. |