Really? Are we in a recession?

[Rob_B]

<snip>

The recent recession was hardest on those who relied on credit on a daily basis. It had little to no impact on the cash rich or those with adequate savings.

Probably not even just those 2 types. Those who live below their earnings but weren't cash rich nor had to dip into savings (I'd say I come under that category) didn't feel it much, I barely see any change in my outgoings & haven't had to get any help from savings or cut back at all

Like you say, it's common sense, unfortunately not a lot of people seem to have that nowadays as they've been used to splurging when the urge takes them & paying for it later. I know a couple of people in that category, one has aways been in debt but manages to spend money like its going out of fashion, I'm sure he's feeling the pinch now!

[Whiternoise]

About the finding it tough comment, I'm also in a fairly middle class family who hasn't really felt the pinch. I think the main thing I've noticed is the amount of price-jacking that's happened in retail on certain things, not enough to affect massively, but WHSmiths selling a bag of Haribo for £1.79? Come on, that stuff's £1!

If people were so good at maths then we wouldn't be in the midst of such economic problems would we??

The reason that many people are so much debt is because they could not do the maths in the first place.

Not sure if that's sarcasm, but arguably we're in this mess because there were people who had more maths knowledge than sense

[TheAnimus]

Ah but were do you put the blame?

Is it in those who borried money they could ill afford, but one could argue pretended they could?

Is it in those who used maths incorrectly ignoring correlation, and reduced the risk?

Is it in those who kept the intrest rates artifically low, thus driving people to need to find new markets to push the money into.

But as a tory MP said, most people haven't had it so good.

[Bugbait]

Probably not even just those 2 types. Those who live below their earnings but weren't cash rich nor had to dip into savings (I'd say I come under that category) didn't feel it much, I barely see any change in my outgoings & haven't had to get any help from savings or cut back at all

Agree, in my haste to post I completely overlooked this one. I would call this the “sensible” category. People who live well within their means are rarely affected by downturns in the economy.

But as a tory MP said, most people haven't had it so good.

The only point of contention in that statement for me would be the appropriateness of “most”. For the sensible people as discussed above that statement is absolutely true. With a downturn in the economy there are discounts to be enjoyed. Anyone with a mortgage and adequate funds is laughing. A drop in the base rate of 5.5% (peak for when I had my mortgage here) to the recent 0.5% low has shaved loads off my minimal mortgage commitment. By keeping the same repayment levels that’s extra off the capital owed on my mortgage each month which significantly reduces the total interest payable on the life of the loan.

In light of all the job losses we have to keep in mind that a fair portion of that could be fat trimming from the growth and bloat days. I’m not convinced the recent recession was as bad as the media portrays. It was a bubble of absurd credit bursting before it got more ridiculous.

[mcmiller]

Ah but were do you put the blame?

Is it in those who borried money they could ill afford, but one could argue pretended they could?

Is it in those who used maths incorrectly ignoring correlation, and reduced the risk?

Is it in those who kept the intrest rates artifically low, thus driving people to need to find new markets to push the money into.

But as a tory MP said, most people haven't had it so good.

why blame? why not make sure it doesnt happen again

[aidanjt]

The blame lies with the economic system we're using, it's inherently designed to inflate until it bursts. Money which can be magicked out of thin air is always unstable. The idea of tying the money supply to debt was thought up by a banker who wanted to make up endless sums of money out of nothing with no effort of his own, at the expense of the populous.

When the system bottomed out, and the bankers started calling back in those markers, guess who they also tapped for 'lost earnings'?

[TheAnimus]

ah aidanjt, but what about service?

if a lady charges a man to money to sleep with her, has she not just magic'd cash out of thin air?

or is there then an intrinsic worth to every woman? Does this mean that for every woman born there is more money created!

But in response to the OP, we aren't really in a recession because we've got growth in GDP:
http://www.bbc.co.uk/news/business-12058452
Now most people call a recession two quaters of negative growth. So no we're not.

What we have is a very bad balance sheet for a country.

[usxhe190]

why blame? why not make sure it doesnt happen again

It's a fine balancing act I think.

[Rave]

In light of all the job losses we have to keep in mind that a fair portion of that could be fat trimming from the growth and bloat days. I’m not convinced the recent recession was as bad as the media portrays. It was a bubble of absurd credit bursting before it got more ridiculous.

The previous recession wasn't as bad as it could have been because the BOE dropped interest rates and pumped loads of new money into the economy through Quantitative Easing. As a result, our trade deficit is still very high, inflation is high, and debts have not been paid down. The problem has been pushed down the road, but it has not gone away. I am I suppose a natural bear but I'm very pessimistic about the next couple of years. Next week I'll be buying some Gold and Silver for a start.

[TheAnimus]

never a better time to buy gold than when its at an historic high!

sarcasm aside, even the FTSE is looking a bit high right now:
http://www.google.com/finance?q=INDEXFTSE:.FTSE
esp if you do the 5 year.

[Lucio]

never a better time to buy gold than when its at an historic high!

Gee, wouldn't it be nice if we had say, 400 tonnes, lying around in the Treasury still, we could sell it to pay off some of our debts whilst the price was good, rather than wait for it to drop (or someone to realise that it's nigh on worthless compared to aluminium, iron, or rare earth metals)

[badass]

never a better time to buy gold than when its at an historic high!

sarcasm aside, even the FTSE is looking a bit high right now:
http://www.google.com/finance?q=INDEXFTSE:.FTSE
esp if you do the 5 year.

So what else is there to invest in?
I last topped up at the end of November when the FTSE was below 5600

[Rave]

never a better time to buy gold than when its at an historic high!

Well yes, ideally I'd have bought some a year or even six months ago, but I didn't have money to save/invest then, and I do now, so whaddya gonna do?

A lot of pundits I respect think that the bull market in commodities has a long way to run, I'm not even sure we've seen a bear trap selloff yet; I'm not that inclined to wait for one before buying at least some gold. In any case, this is not just a speculative punt for me, it's also a hedge since I am genuinely concerned about rising inflation, and I don't think I could keep up with inflation by staying in cash even in the highest interest ISA I can find. So I'm thinking of going about 1/3rd into gold and silver. Whether I do that through someone like GoldMoney, or by simply hiding a few 1oz Brittanias and 1kg silver bars under the floorboards I haven't decided....

sarcasm aside, even the FTSE is looking a bit high right now:
http://www.google.com/finance?q=INDEXFTSE:.FTSE
esp if you do the 5 year.

You got any free financial advice for me then?

(or someone to realise that it's nigh on worthless compared to aluminium, iron, or rare earth metals)

Gold is useful stuff, they don't coat all the electrical connectors in your computer with it for bling value you know. Ditto silver- lots of industrial and medical applications.

[Bugbait]

So what else is there to invest in?

I’m buying a new house. Given the increased difficulties in lending now, there is less competition and it seems a good time to upgrade (lumped with low base interest rates). Rental demand on our current place (3BR Flat) is quite high which is a nice bonus. Although the stock market yields better returns my wife and I like property. My father invests my stock portfolio for me since he enjoys it (retired) and nets far, far larger returns than any BS “portfolio manager” I’ve used in the past. Laziness on my part also prevents me from doing to myself at the moment.

[oolon]

sarcasm aside, even the FTSE is looking a bit high right now:

That is why I have been selling my shares for the past few months, when family members (general public) start getting interest in shares you know its time to sell up, and move to a more forgotten about market (my gamble is on property).

[Rave]

Property is likely to tank massively in 2011- I reckon 10% minimum. You should be getting out, not in.