Do you Believe in the Recession?

Question:Is the recession real? Is it real enough for you?

Answer: Have you changed your spending habits? Do you you respect the dollar yet?

If you have not read my first post "Thank God for the Recession", nothing else in this blog will make sense to you. The premise described there is the government loves to cheat economics by printing money. This fuels economic booms. This also causes inflation that must at some point be corrected by taking money out of the economy. The removal of this money causes recessions. It increases the value of the dollar and restores long term confidence in the Dollar.

We have heard of people speak in the past of the Fed engineering a "soft landing". The concept of a soft landing is that the Fed slows down the economy by tightening the money supply just enough to cause strengthen the dollar without the drama of corporate bankruptcies and layoffs. Its a fantasy.

The "soft landing" can simply not work because it does not scare anyone. The problem with economic booms is that people loose respect for the dollar and spend it like its just the paper that it really is. People only respect what they fear. For people to respect the dollar they must fear that their supply of dollars will be cut off. You can not have this shift in psychology unless you have companies laying off people by the thousands and corporations going bankrupt. Anything less then this and everyone will assume that this is just a minor bump in the road... a correction to shake out weakness in the market. In order for a recession to work and increase the dollar's value significantly, people must be CONVINCED that they are in a real recession. A recession is not convincing unless people believe that it has the potential to become outright depression. Only then will they tighten their belts and save their pennies. I still see people leaving pennies behind at the cash registers. Perhaps this recession in not yet convincing enough.