How Long is the Recession Going to Continue?

What recession you may ask, weren't we out of it months ago?

Well technically yes. Recession is determined by a period of negative growth or shrinkage in the economy. We technically came out of recession when the official figures went positive ages ago. But that growth is measured in fractions of a percent, so not very positive.

With Inflation now near 5 percent and set to rise even further, the fractional growth in the economy is wiped out. Currently we're having to run just to keep up. Those with savings are earning possibly a half percent in interest, which again is wiped out by inflation and are in fact losing money in real terms.

So all things considered its a pretty bleak time and the net effect is in real terms a recession.

I said a couple of years ago in a blog on another (now closed down) site the banking crisis and the accompanying recession will last one, maybe two decades before we get to the levels of prosperity we had prior to the bust.

I was told way back then that I was mad to suggest that long a period of recession: most lasted 2-3 years and we would be back on our feet.within that timeframe.

Well, it's now over three years since the start of the banking crisis and things have not improved: if anything they have got steadily worse. The banks still aren't lending at anywhere near pre-crash levels. The problem being the toxic debt still hasn't been purged from the system. The Labour Government's decision to print money as a solution to the problem is now rebounding, with inflation way above target and continuing to rise.

Since the crash we have also promised to prop up not only failing banks, but failing countries too. Now our money is being sunk into securing the dodgy debt of not only our own national banks, but the banks of foreign countries. In return they will be forced, (so we hope) into taking drastic austerity measures in order to repay that debt owed to us. Austerity measures that we ourselves should be taking, given our levels of debt are not
far off Ireland's.

The problem is, we don't have the money to give, instead we borrow from abroad to hand it over to the ECB as part of the finance package, hoping upon hope that the interest Greece, Ireland and Portugal pay on the debt is higher than we're paying on the loan we took on to bail them out and praying to God none of them defaults.

Its no way to run a country and its not going to get us out of recession. Tieing ourselves to supra-national failing economies is a recipe for pain and anguish. When people start to hurt, they need to blame somebody, usually those better off than themselves. I'm just wondering if in ten years time we'll still see the Euro in use, or even the EU as it is today.

What I do know is there is mileage yet in this recession. Several year's worth.