A Recession is Coming, A Recession is Coming!!!!

Like the famous saying of Chicken Little, "The Sky Is Falling", we have financial analysts similarly running around telling us that a "Recession is Coming". But jokes aside, their forecast seems to be on track.

Over the past few months analysts have been predicting that we are in for a hard recession this year. And that recession might be a very unpleasant one. It could even be worse than 2001's economic bust.

The reasons? Well one known fact is the falling housing market. Houses are not moving off the market as they were a few years back, and a lot of people are defaulting on their house payments. As foreclosures increase, the banks are losing their reserve funds.

Add to that the rising debt of the American consumer. And it's not only about credit card debts, but home equity loans which have inflated the economy's health to a degree. As this borrowing has grown, the savings versus debt ratio is growing along with it.

The GDP of the country has also shown the trends of this slowdown, as it had gone down quite considerably at the end of last year.

But at the same time inflation keeps growing. The Fed really has its work cut out for it, especially looking at the problems plaguing our economy.

In the meantime Fed chief Bernanke feels that the economy is a good shape, and there is nothing to worry about, yet his predecessor Greenspan feels that there are issues, and the recession is very possible. True that economic trends are cyclical, but some analysts believe that the dip in the US economy are going to be a lot worse than expected.

Listening to an analyst's predictions this morning on the radio, I felt some butterflies in my stomach, as he stated his feelings. His thoughts were that if the current housing bust and defaulting of loans continued, it will surely cause a recession. Also he stated that the US Dollar was losing a lot of power overseas. This loss of 'strength' could cause a downward spiral in the economy of the US of course, especially in consumer related goods and services. The rise of imported goods would impact those two areas quite considerably. His feeling was that the recession could lead us to a depression, and maybe even a change in lifestyle, and that being not for the good. He felt that the European and Asian countries might come out well ahead of the US if such happened. His 'doomsday' style prediction does sound very frightful indeed.

Let's hope that somehow this economy isn't as bad as they say it is. Hopefully there's a corner we will turn which will save us from any economic downfall.