I think we are going into recession caused by self-fulfilling prophecy
TLDR: If we keep believing there will be a recession, that in itself will cause a recession.
Story time
Firstly, to discuss about recession, we first need to know what is a recession. A recession is
A recession is a significant decline in economic activity, as measured by a drop in GDP, real income, employment, industrial production, and wholesale-retail sales, over a few months.
A simpler way to understand a recession is that everyone is spending less money over a long period of time.
That can be caused by people getting worried about the future so they save more instead of spending more. Even companies gets worried so they fire people to save cost, which mean people lose their jobs, so they can't spend as much.
it is a vicious cycle
When you spend money, that money becomes another person's income, which allows them to spend it and so on. So when everyone starts to spend less and save more, someone else starts to earn less. That means they have to spend less, which causes someone else to earn less, and so on.
So you can see how the fear of a recession can technically be the cause of a recession when everyone start acting on it.
Currently
What we know is that companies, like $Tesla(TSLA.US$ and $Sea(SE.US$, are cutting jobs because they are worried about a recession coming. The silver lining is that, many companies are still hiring, so hopefully they don't start cutting jobs too.
We know that many have lost a lot of money gambling in the stocks and crypto market on $Robinhood(HOOD.US$, so spending will fall. We do know that there is a drop in GDP already. But there is also a revenge travelling and spending phenomenon too after travel restrictions have been opened up. Hopefully that will help to prop up spending.
There are also more and more news and talks about recession that is coming soon, and even stagflation. That usually creates more fear, and so long as everyone just spend a bit lesser, that could be the triggering point for the recession.
So let's see how it goes![]()
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source
https://seekingalpha.com/article/4495762-economic-recession
Story time
Firstly, to discuss about recession, we first need to know what is a recession. A recession is
A recession is a significant decline in economic activity, as measured by a drop in GDP, real income, employment, industrial production, and wholesale-retail sales, over a few months.
A simpler way to understand a recession is that everyone is spending less money over a long period of time.
That can be caused by people getting worried about the future so they save more instead of spending more. Even companies gets worried so they fire people to save cost, which mean people lose their jobs, so they can't spend as much.
it is a vicious cycle
When you spend money, that money becomes another person's income, which allows them to spend it and so on. So when everyone starts to spend less and save more, someone else starts to earn less. That means they have to spend less, which causes someone else to earn less, and so on.
So you can see how the fear of a recession can technically be the cause of a recession when everyone start acting on it.
Currently
What we know is that companies, like $Tesla(TSLA.US$ and $Sea(SE.US$, are cutting jobs because they are worried about a recession coming. The silver lining is that, many companies are still hiring, so hopefully they don't start cutting jobs too.
We know that many have lost a lot of money gambling in the stocks and crypto market on $Robinhood(HOOD.US$, so spending will fall. We do know that there is a drop in GDP already. But there is also a revenge travelling and spending phenomenon too after travel restrictions have been opened up. Hopefully that will help to prop up spending.
There are also more and more news and talks about recession that is coming soon, and even stagflation. That usually creates more fear, and so long as everyone just spend a bit lesser, that could be the triggering point for the recession.
So let's see how it goes
source
https://seekingalpha.com/article/4495762-economic-recession
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PandaMoo : Many bad people wants to crash the economy on other people expense. They want prices go down, so they can load up more or in the retail world, these bad people expect certain stock price to be affordable for them or buy the stock in bulk.
People getting tired too for the negative sentiments going around for recession, people will strive no matter what, bro!
doctorpot1OP PandaMoo: hmm I do see that recession is part and parcel of the economy though. Same with booming economic growth. That is the result of the long term debt cycle.
this video explains it very well. https://youtu.be/PHe0bXAIuk0
pro-active NyanCat_2 : This is exactly my belief too, thank you for iterating this in clear crisp terms.
MoneyComesMoneyStays : The people who want a recession are the same people who always want one, the people with a lot of cash on hand. Investing when everything is down is always best as long as you can wait it out for the next bull run.
doctorpot1OP pro-active NyanCat_2: no problem
you can also post your thought in the discussion too and stand a chance to win 600 points. Moo Moo have lots of such events and some even give out Cash vouchers as prizes.
Can follow the image below on how to join
doctorpot1OP MoneyComesMoneyStays: I agree that there are people whom are waiting to buy in even more when recession happens, because they know that it will come and it will end. After a bear market is definitely a bull market.
but I do see that recession is part and parcel of the economy though. Same with booming economic growth. That is the result of the long term debt cycle.
this video explains it very well. https://youtu.be/PHe0bXAIuk0
MonkeyGee : Thanks Joe, we couldn't have done it without you.