One thing you must do to survive and thrive in the recession

If you read my blog you are probably interested in what the current economic crisis means for your personal future. The trouble is that journalists typically either grab some shocking headline based on a piece of bad news (which is either irrelevant to us personally or just plain depressing) , or go into so much detail that the average person is bored and confused within a few sentences.

Neither of these situations really makes us much the wiser or helps any of us make good personal decisions. I thought I would try fill this gap by taking an expert and detailed news report and converting it into layman speak, so that anyone reading this can actually learn something of value.

At least I will try and let you be the judge of whether or not I’ve succeeded. So here’s a great report last week from CNBC. Its an interview with Kyle Bass, Managing Partner for Hayman Capital in the US.




It’s heavy going for the layman but there are some key points which I’d like to explain as they have huge significance for any working person or person looking to earn money in the recession. If we can make our decisions with the benefit of the best information available on the economic outlook , we will make better life decisions. It’s really as simple as that.

The first point explained here is that the global economy is not de-leveraging, What does that mean? To put it simply, the amount of credit in the global monetary system is increasing 3-4 times faster than GDP growth. This would normally put upward pressure on inflation, but this is being artificially restrained by low central bank lending rates and less consumption.

Here’s the translation; our government and central banks are printing money to try and prop up the economy. Inflation is only being avoided because of stagnation or reductions in government, business and household spending and low investment returns. In short our economies have stalled and there is nothing on the horizon which can drive growth back into them. Without growth, job and income prospects for everyone in or seeking employment are bleak.

Meanwhile in the US, housing market values have bottomed out, but there isn’t a real prospect of major price growth because earnings and incomes aren’t increasing enough to support increased lending to homebuyers. Worse still, lenders are still trapped by the conflicting regulatory requirements of needing increased capital strength and government pressure to lend – a broadly similar situation exists in the UK. Translation; the traditional default investment of most working people in the UK - their homes, are not going to deliver any real appreciation in value any time soon, and in fact on a localised basis could still show significant price falls in future.
 
In the Eurozone, Germany cannot and will not ultimately provide ‘joint and several’ for the sovereign debt of struggling countries in the Euro. Joint and several is just jargon for underwriting or covering the debts of those countries in economic crisis. If Germany won’t ultimately cover those debts, many more people in Europe are going to see a collapse in value of their assets and incomes over the coming months and years. Hence European markets upon which UK businesses are heavily dependant upon will continue to contract over the coming years, destroying UK jobs in the process.

Now I know I’m probably sounding like a doom monger at this point. But there is a key point towards the end of the interview which I must highlight and which I think will revive your hope. At this point the interview discusses where investors can place their investments in such a stagnant world economy. And the answer from Kyle Bass is critical – ‘invest in productive assets’. That’s his message to investors and it’s just as relevant to you. No I’m not talking about investment in the way that he is. But the principle is the same – it’s the correct investor response to the recession and it's also the correct personal one.

I’m talking about the investment of your time and energy (at least however much you can spare) into the creation of your own productive assets. These are assets you can create, own and generate an income from which cost you little or no money , just a little bit of your time to set up.

Just download my free report here www.40pluscareerguru.com to discover more right now about how you can do this much more easily than you would have ever thought possible. It’s obvious really. If you have assets earning you money month in month out, and they are almost free to obtain, why wouldn’t you want to own them? And how much less would you worry about your job security if you did?

So I hope this all makes sense. Don’t just hope that somehow the politicians or an economic miracle will save you. Take things into your own hands and save yourself. You can do it and now is the time to start.