By Henry O. Aldana
4 of 4
About this time next year, we will not be celebrating Labor Day; we will be commemorating Layoff Day. The next four quarters, beginning with the last quarter of 2011, will begin to experience the darkest period of the great recession that began in 2007. In the next four quarters will see the highest unemployment rates of the last 80 years. At this moment there is no panacea for our economic recovery. There isn’t a presidential plan, nor government program or any private initiative to stop the inevitable. In fact, it is necessary that the economy hit bottom so that it can be restored. This is a natural cycle, just like a human been; we are born, go through the development process and finally we die. And the good news is that we will begin to see a slow recovery in the second quarter of 2013. Again, it is the natural course of an economy. You have to hit bottom in order to come back stronger and emerge from the dead.
In last week’s article, I recommended that the main objective of most entrepreneurs should be to survive this final stage of the economic cycle. Now it is the time to go into severe austerity in order to survive. It is not the time for expansion; it is time for contraction. We tend to have an expansion mentality, but this time I advice to hold on to your capital. Do not invest your capital; keep it very safe, as liquid as possible. There are two kinds of losses we can experience: The Lost Capital and the opportunity. If today we protect our capital, there will be more opportunities. But if we lose the capital, we lose future opportunities.
The natural cycle of an economy has a life of eighty years. But if we see the big picture, Europe is about to enter a depression, and when they fall, the U.S. will be next, then China and other countries that depend on the U.S. market.
Last Thursday President Obama talked about a plan to put people back to work; in my opinion, fiscal policy does not work immediately and the plan the rebuilding the infrastructure of this country will take a long time, and the action will not happen overnight. The only thing that his speech has cause is another temporary bubble (for a couple of weeks) in the financial markets and the stock market. But do not confuse movement with results. I assure you that, at this time, there is no president or politician that could change the natural course of the economy.
Prepare for the worst. Do your best to keep your job, or start your own business to survive if need too! Cut your costs as much as possible. Sell cars or things of value that you do not need, keep canned food and water, medical supplies, prescription drugs, and use common sense. If you are considering divorce, try working on improving your relationship with your partner and try to save your marriage instead of a separation. Together you will be stronger to withstand a severe depression. . Good luck and God bless us.
Translated by Google.
This is la last article written last week. I will begin a new series. stay tune