Recession Vs Depression; and how to PROTECT yourself against it.
By JF LENNON | 17 July 2020
Singapore has declared it’s entering a technical recession for the first time since 2009. On a quarter-to-quarter basis, the economy shrank a record 41.2 per cent in three months to June. (source: The Straits Times, Singapore enters technical recession as GDP plunges 12.6% in Q2, Jul 2020)
With the worrying outlook for the rest of 2020, one can expect that there will be a spike in retrenchments and unemployment. We should brace ourselves for a rough ride ahead of us, who knows when it’ll end.. Will the economy go into depression?
Economic Recession? Economic Depression?
While there is no definitive difference between Recession and Depression; lets start by defining the two.
Often describe by economists and journalist as two consecutive quarters or six months of decline in gross domestic product or GDP, which is a number that represents that total value of goods and services produced within a country — every Shopee purchase, every McSpicy sold, every haircut you had and so on. It’s considered the end of recession when GDP climbs back to pre-recession levels.
While there is no standard definition for depression, it is commonly defined as a more severe version of recession.
“There are repeated periods during which real GDP falls, the most dramatic instance being the early 1930s. Such periods are called recessions if they are mild and depressions if they are more severe.” – Gregory Mankiew, Professor of Economics, Harvard.
The most famous economic downturn; the Great Depression, lasting from 1929 to early 1940s. It took almost 25 years to recover from the event.
With Covid-19 prevalent around the world, the economy is taking a nosedive and we’re in the midst of a recession and should be prepared to face the economic depression of our era.
- The markets took about 25 years to recover to the pre crisis levels during the Great Depression.
- In comparison, it took 4 years to cover from the ’07-’08 recession.
While it is difficult to predict how long will this last or how far will be economy shrink, what we’re certain of is that IT IS HERE and IT IS NOW. Theres no running from it, we need to equip ourselves to face this.
EVERY CRISIS PRESENTS OPPORTUNITIES
Investing or seeking a side hustle now is a smart move in order to ensure financial stability later on.
NOW is the time to build your investment knowledge and skill!
Educate yourself now because in time to come, you well-spent time will become your BIGGEST ally and asset.
Many are looking for alternatives to unemployment and ways to supplement their income and it is a good time to look into FOREX TRADING but this is not your get-rich-quick programme that will bring your riches immediately. If you take trading as a Mastery and take it serious, this can truly become your biggest asset in time to come.
Want to Learn more about FOREX and how to trade?
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