A Recession Is NOT the end of the World

but the beginning of a brave new one....well not exactly, but it could be.

Hey Jessincial analysts

So there has been much talk about the next global financial crisis. It seems like every time I check out financial news online there's someone coming up with a new reason why we're on the brink of collapse.

We've long forgotten the crash of 2008 and banks are borrowing, consumers are borrowing, businesses are borrowing and no one is paying back the money.

The bubble but...

Homes, Stocks, Bonds, Student Loans, Car Loans, Home Loans are all in a bubble and while we can't predict when the foreclosure rate will hit a point where it brings down the entire system, you can be assured that it will happen eventually.

The thing is markets will come down and you want them to otherwise you’ll be living in a giant bubble were everythings price keeps going up. When it does pop, has the power to produce a recession far bigger than any great depression.

Recessions are normal, economies are meant to expand and contract to find an equilibrium and they are nothing to be frightened of.

The issue is when you try to prolong the recession you make the correction/recession even worse, which is exactly what we've been doing.

These large drops are a product of a broken economic system that was never fixed only papered over with the ability to print infinite amounts fo money to cover the cracks.

You can’t predict the timing

I don’t care if you are Warren Buffett or Jimmy Buffett; you cannot predict a recession. There are false starts, further highs and tiny lows that seem meaningless all before a recession comes.

That's the problem with it, it often blindsides everyone when it arrives which is why people hate it so much.

There are very few people who have a layer of protection when their jobs are lost, salary shrinks, things cost more and with so many people living on the edge, the slightest change can push them into bankruptcy.

Image source: - fortune.com

We always recover from recessions

Unless you believe the human race is doomed and will end shortly, then know that we will always recover from a recession.

A recession is the winter season of business and money itself. Winter doesn’t last forever and statistically, on average, it takes around two years for things to go back to their original highs.

Making sure you can survive through the winter is one option, the other is to start picking up, stocks, bonds, crypto or homes which will be available at cut-price deals, spreading your risk and building passive sources of income.

An opportunity for something new

Einstein says that the definition of insanity is repeating the same thing over and over and expecting a different result. Many of us will be doomed to repeat it yes, through our own ignorance and lack of financial and economic education.

BTC was born out of the 2008 recession and it will be interesting to see how it and the many alts available will fair over the next one.

Since crypto is pretty liquid and there's very little institutional money sitting in these things I think when a recession does hit you will see a mass sell-off. It's easy to forget about HODL'ing to the moon when you need to put food on the table.

What I think will happen with crypto

Once the markets start to normalise I think we will see a lot of that overvalued financial instruments will not return to their ATHs. Some of this value will flow into crypto.

While currency buying power will be at all-time lows and value will flow back into crypto. Crypto prices will be higher than before technically but that won't mean crypto is that much stronger or have more buying power.

From this new base, we will then see how we strong this sector really is in creating real-world value, which so far has eluded us. Apart from being a cryptocurrency middleman/exchange, I have yet to see a startup in this space create real measurable wealth with the tech.

Let's connect

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