Jump to content

Exchange Blog Cryptocurrency Blog

All Pips

Recessions Aren’t Real


Recommended Posts

Recessions are weird.


The more you think about them, the weirder they become.


Yes, the economy is cyclical. Downturns aren’t just inevitable, they’re healthy.




Economic cycles, including recessions, are not just determined by clean and predictable financial indicators but also by psychological and sociological factors.


Collective mood, media reporting, and public sentiment play a substantial role in shaping economic realities.


And they can be manipulated.


A.] The Fear Factory


Every time the media starts shouting "recession," what happens?


Panic. Fear.


It's like Halloween but for adults.


And this fear isn't just innocent fun – it moves markets, influences decisions, and causes real harm.


Give me an example of when the media saw a chance to scare the crap out of you and didn’t take it?


I’ll wait.


B.] Recessions are Relative


Consider this – what's called a recession in one country is a day in paradise in another.


Economic conditions are relative.


If the standards are so skewed, can we really trust this whole concept?


C.] The Recession Whisperers


Imagine a secretive group, not in some government bunker, but in a quiet office in Cambridge, Massachusetts. That's the National Bureau of Economic Research (NBER), the recession referee.


But here's the twist: By the time the NBER declares a recession, it's like announcing rain when you're already soaked.


Their method involves a retroactive look, meaning they wait for six months of data, plus a one-month lag.


So, when they finally declare a recession, it's old news, a story you've been living in, not just reading about. In the world of economic predictions, the official-unofficial referees are not the early birds; they're the historians.




D.]The GDP Puppet Show




It’s supposed to be a “health check” for the economy.




It's like going to a doctor who only measures your height and ignores your blood pressure, cholesterol, and heart rate.


It counts every dollar spent, regardless of what it's spent on.


That means disasters, wars, and environmental destruction all pump up the GDP. If a hurricane hits and we spend billions on reconstruction, guess what? GDP goes up.


Celebrating a GDP increase is like throwing a party because your house burned down and you had to rebuild it.


It’s also the main indicator the NBER uses to measure a recession.


The real problem with this is…


GDP is a broad measure and can be influenced by short-term fluctuations that don't necessarily reflect long-term economic trends.


It’s a useful indicator, but far from comprehensive.


E.] The Self-Fulfilling Prophecy


Here's the kicker – by declaring a recession, we make them more likely.


It's a classic self-fulfilling prophecy.


Businesses pull back on investment, consumers close their wallets, and just like that, the economy slows down.


But what if we didn't buy into the narrative? I have no idea.


F.] Rage Against Determinism


Economies aren’t deterministic. They’re dynamic.


Economies don’t follow a predetermined path.


Human agency and perception play a significant role in shaping economic realities.


Predictions are usually wrong for this reason.


Also, there’s this…


G.] The Hidden Agenda


Tin foil hat time.


Think about who benefits from recession talk.


The media gets a juicy story.


Politicians get a scapegoat.


Certain investors get to buy low.


It’s a game, and the average person isn't the one winning. You’re always being sold a narrative that serves others, not you.


And Yet, a Recession is HERE


Of course, recessions exist. Because prolonged downturns exist.


But all of this calls into question what we think we know about the word “recession” and how we talk about it.


It’s not as clear a concept as we think.


Nevertheless, it’s probably here already.” – Chris Campbell (AltucherConfidential)

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...