How to predict a recession and how to end one – the definitive guide
Hello and happy new year! doesn’t it just feel great to be back in business? No? Perhaps the recession blues are getting you down then.
And on that note I thought I would begin the year with something completely unrelated to mortgages but connected to todays completion of the new world’s tallest building in Dubai.
You see there’s a lot of talk flying around about how can we ensure that this never happens again, that theres never another recession or credit crunch and that banks are never again allowed to overstretch themselves.
The answer to this question is in fact that you can’t. What goes up will in fact go down sooner or later, and growth is always followed by decline at some point down the road. Gamekeepers have known this longer than most and I first heard it put into terms by a comparison to the populations of foxes and rabits.
Fox and Rabbit populations have been recorded for centuries and it has long been observed that Rabbit populations mushroom until overcrowding causes disease to make them weaker and more vulnerable to predators like the Fox. And so Fox populations have also followed Rabbits peaks and troughs because the number of Fox’s inevitably goes up as Rabbit populations increase, but then when the Rabbits decline a lack of food for the Fox also inherantly leads to Fox populations going down too.
What’s the point of this? In the middle of the last boom I heard a theory that recessions can be predicted as they always appear to happen upon the construction completion of the world’s tallest building.
Now I had forgotten about this altogether until I heard on radio 4 this morning that the new world’s tallest building has just been completed in Dubai. The theory says that as building the world’s tallest building is a mark of prosperity then it is something that a country will only consider when the good times are rolling, and by the time its off the drawing board and into construction its pretty likely those good times are coming to an end.
So if you want to know when to sell everything, and go on an extended world tour keep an eye on those construction projects!
Now as for how to end a recession its pretty simple. Stop putting prices down and put them up instead, it’s just human nature that if prices are going down you wait to buy until their cheaper and if their going up you buy now before they get any higher – And that my friend is why you can gaurantee one thing,
It will, most definitely happen again.