According to the World Economic Forum in a recent report, some 80% of economists expect the US to experience not just a continuation of the current recession, but a double-dip recession in 2021. Worse still perhaps, of these global economic experts, the recession is not expected to end until the latter part of 2022, greatly increasing the likelihood that the United States will not merely experience a recession, but a full economic depression.
Perhaps worse still is the nature and the cause of the recession. While some people may wish to blame the recession on the global Covid Pandemic making it more challenging, the reality is that the recession is a direct result of the government response to the Covid Crisis. Though whether or not the government could have done anything differently remains subject to fierce and intense debates. Regardless of the cause of the great economic crisis of 2021, more people than ever before are being forced to rely on Flash Financial Guide and other similar companies to find cash immediately and to help them survive.
- What is a Recession?
- A recession is traditionally defined as a period of economic decline reflected in the GDP or Gross Domestic Product that lasts more than two consecutive months, or a full financial quarter of growth.
- What is a Depression?
- A depression is traditionally defined as an extreme recession that lasts three or more years or which leads to a decline in real gross domestic product (GDP) of at least 10%. in a given year.
It should be noted that we stated that these are “traditional definitions” as some economic agents and agencies like the National Bureau of Economic Research or NBER want to change the terms in order to provide the people with a rosier and more optimistic economic forecast. This, despite the reality of the economic hardships facing the nation for the near future.
While it is nice to believe that simply changing the language changes the realistic outcome that the people are likely to experience during tough economic times, reality is not generally quite so kind. The fact remains that large numbers of people, including those that have normally had and kept solid gold credit ratings, are increasingly forced to find payday loans online or otherwise find access to instant cash in order to survive.
Moreover, the economic recession of 2021 is exceptionally unique in that this is the first time an economic recession has struck directly in the midst of the middle class and within the service industry. While large multinational corporations have increased their net worth by more than a trillion (yeah, with a T) dollars, record numbers of small businesses and mom and pop shops have been going out of business.
The closing of so many small businesses is unprecedented and exceptionally harmful given both the number of people it puts out of work and into the unemployment lines, and because of its impact on economic circulation.
Big multinationals may make larger investments, and still circulate some of the money in the current economic system, they do not circulate it at the local level. This means that the people will bear the brunt of the economic downturn while the wall street bankers and multinational corporations increase their holdings and value. The irony of course is that the middle class is the very heart of a circulatory economic system such as ours.
- What is the Gross Domestic Product?
- The gross domestic product or GDP is the total value or worth of all finished goods and services produced within a country’s borders in a specific time period, generally based on financial quarters, or periods of three months.
- What is the Gross National Product?
- The gross national product or GNP is an estimate of the value of all final products and services turned out in a given period by the means of production owned by the people of the nation.
- What is a Circulation Based Economic System?
- A circulation based economic system is one that relies on the ability of the people of the nation to earn and spend capital, circulating the currency throughout the economic system. This process increases both GDP and GNP and at the same time, reduces unemployment through increased demand for goods and services.
A circulation based economic system requires that money or currency be constantly circulated into the economic system in order to maintain GDP and GNP. If you have ever been forced to rely on finding cash immediately using payday loans online, chances are better than not that you do not merely stuff your paycheck into your mattress, but spend it when you get it.
Maybe you are spending your money at convenience stores that only employ a few people, or maybe at the grocery store that employs a few more? But each one of those people also gets a paycheck and also spends it and circulates the money back into the economy.
The economic recession of 2021 has removed the ability of many people to have any money to circulate, reducing GDP, GNP, and forcing additional small businesses to close, further straining the economy. With fewer people being able to shop, more stores are closing, increasing unemployment rates and decreasing the amount of currency in circulation.
If you have a whole lot of something (other than money or currency at least) it tends to not be as valuable to you. If I have a fresh case of beer in my refrigerator, I have no problem with my roomie or neighbor grabbing a beer. If I am down to my last beer, while it does not increase in value or worth, it is still more valuable to me as I do not have as much.
Inflation is caused when there is too much currency circulating in the economic system, and it has a reduction in value. Supposedly at least, the federal reserve was put in place to prevent the economy from experiencing any periods of excessive inflation or deflation, but given the great economic turbulence that has continued even after the introduction of the federal reserve in 1913, their efficacy may be at least questionable. This can be evidenced by the recent increase in the M1 money supply.
The M1 money supply is the sum total of all of the currency currently in circulation, including the bills and coins such as the federal reserve notes that you would like to see in your wallet about now and checking accounts. According to the Federal Reserve Bank, the amount of the M1 money supply has increased 350% since last year from 4 trillion US dollars to an incredible 18 Trillion dollars at the time of this writing.
In fairness, this is not merely the result of them printing up new currency and throwing it out into markets where the people still have no access to it, but rather a change in accounting tactics. Savings accounts used to be counted among the M2 money supply which included additional bonds and other assets not counted as being in circulation.
Recent changes in accounting by the fed has resulted in Savings Accounts being counted as part of the M1 money supply, not that a whole lot of people have any savings left after the global Covid Pandemic. The fact remains that the average person is increasingly relying on instant cash loans online and other means of finding cash immediately just to survive.
In this day and age among these tough economic times, more people than ever before are trying to learn how to save money on everything from grocery shopping to long-term installment loans, and looking for additional ways to earn quick cash just to survive. If there is an upside to this, learning how to survive during an economic recession should also help you immensely even after the current economic crisis subsides.
Flash Financial Guide offers many options, from finding instant cash loans online to helpful hints and tricks to both save money and to earn money. It is hoped that these short-term installment loans will better serve to get you through the tough times, while at the same time, providing you with the information you need to improve your financial future, not just with instant cash loans online, but also by learning better ways to save and earn money.