Federal Chairman Bernanke Speaks about the Obvious

Today I got to hear Fed Reserve chairman Bernanke tell Congress the hard truth about our economy and the direction things could be heading. With GNP being virtually flat and consumer confidence at tremendously low levels, that lovely 3 syllable word called “recession” was uttered as a distinct possibility as to what could be in store. The definition of a recession is two or more consecutive quarters of zero to negative economic growth and I think we just banked the first one. 

Bernanke further explained that until the effects of the economic stimulus package could be felt and measured, we could possibly have a second quarter commensurate with the first. On a positive note, he thinks the government’s approach to intervention of a recession should prove effective by later in this year. The tax rebates, in addition to the slashing of interest rates and a generous multi-billion dollar gift to the banking industry, should produce the kind of measured results the Fed is hoping for. Mr. Bernanke spoke of a moderation of the skyrocketing oil prices and therefore keeping fuel prices and food transports at a steady level. He wouldn’t comment on the possibility of another rate cut later this April.

What I didn’t hear was how we were going to have to pay for this later. We are adding to an already seemingly insurmountable budget deficit. Where is all of this money going to come from? If we had all of this extra money lying around, perhaps we should have returned it back to the American people a long time ago or applied it to our massive and growing debt. Would that have prevented some of the problems we are now facing?

One thing is clear about our economy we can’t simply sit back and pretend blue skies will always return. As Mr. Trump would tell you now is not the time to convert all your assets to cash and head for the hills, however, it may be time to make some adjustments. Such as starting to invest in real estate, with hard work and creativity some of the best deals ever are available right now. Perhaps now is the time to really start working on that great entrepreneurial initiative you have been kicking around in your head for a while. 

My question is what are you doing to prepare for what we must call uncertain times? How are you improving your knowledge, position and budget to take advantage of what will be a hard time for some and an opportunity for others? Do you see opportunity or do you see tough times? Remember perception is reality.