Comments on: We’re In A Recession

By: That One Caveman

That One Caveman — Tue, 02 Dec 2008 18:57:55 +0000

By the standard definition of a recession (two consecutive quarters of GDP contraction), we’re not officially one one yet. 2008Q2 actually showed growth. 2008Q3 did contract, so if Q4 does as well (we’ll find out in 2-3 months), then we’ll know whether we were in a true recession. But if you consider that our GDP growth was less than inflation, we actually did shrink even though the number grew.

Bah! Macroeconomics is fun, but hard to wrap your head around sometimes.

By: Patrick

Patrick — Tue, 02 Dec 2008 15:23:29 +0000

I think the biggest problem this country has is that the people are so irrational. Instead of staying consistent and being frugal and saving all year round, they spend way too much when the money is flowing and only begin penny-pinching when the times are tough.

By: Gates VP

Gates VP — Tue, 02 Dec 2008 07:18:52 +0000

OK, I’d advise against the mattress as that makes inflation really hurt. Plus when the economy needs a boost, what it really needs is a bunch of saved money “hard at work”. This typically means putting it in a bank / investment account of some type so that it’s still part of the economy somewhere.

We’re likely looking at a long inflationary recession. That’s where inflation is at 10% and your investments are only earning 7% (or something like that). Cash under the mattress will lose purchasing power at 10% / year. cash in the banks will only lose purchasing power at 3% / year.