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No Free Lunch

Cheap gas is not a good thing. I know, all the news outlets are telling you to rejoice that oil is below $30 a barrel. You'll save hundreds of dollars a year. Etc...
The real deal is we're looking down the barrel of a global recession. Oil is cheap because oil futures are cheap. Because, production of manufactured goods is going down. China is the catalyst. The opportunistic disease in the weak patient.
I don't enjoy being the bearer of bad news. Historical econ cycles predict a recession every 7 years or so. The last major correction was 2008 /09.
Seriously, enjoy the cheap gas. But, be ready for rough times. Put some money away. Buy some extra food. Be ready mentally. Your 401k will drop further. But it may take months, or years to "right the ship".
Have some cash on hand. If things get "weird" and there's a bank run, it's best not to be in the middle of that.
This "down cycle" shouldn't be any worse than the 2001 or 1991. But it may be. Every time, it's just a bit different. But the canary in the coal mine is usually lowered production and lowered consumption.
I may be wrong. Let's hope I am. And, prepare anyway. It's going to happen soon, whether it's next week or next year.

Comments

Thanks for looking out for us, Winston! You have a valid point. Regardless of the circumstances, it's important to develop that economic and political mindset. We can't all assume the stuff we buy in the grocery store will be there in the next ten years. Things change. Companies change. Manufacturing has significantly changed from the labor standards as well as finding the resources (like cotton and coltan). It's definitely something to think about. We can't just push this aside. We have more graduates with greater amounts of debt so saving is tough for our future economy. It will be interesting to see what will happen in the next 25 years.
 
Winston, you're not the only who has such a view. I can't remember who said it but some guy in the news over here saying similar things. Will just have wait and see i suppose.
 
Thanks guys. And dither, I'm not too worried about preparing you "for the worst". Kinda seems like your wheelhouse sometimes. However, I do worry about the general complacency of most folks. There's a big difference between panic and concern.
 

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Winston
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