In yesterday’s Uncommon Money News, I mentioned that billionaire Warren Buffet recently stated that he believes the US is in recession. Although economists may argue that the United States GDP has not gone down for two consecutive quarters, Buffet argues that “people are already feeling the effects of a recession… (and) it will be deeper and longer than what many think.” As Forbes’ current richest man in the world, perhaps Buffet may know a thing or two about the U.S. economy.
Still in the interest of balance, I must say that not all financial pundits agree. For example, Dave Ramsey has frequently said that we are not in a recession although he admits that US economic growth has slowed (see video below for more of Ramsey’s insights). Technically, most economist would agree with him. Additionally, he believes that even if we were (in a recession), that’s often the best time to invest! Thus, everyone should stay the course on his or her investment strategies, as long as they’ve proven successful!
Moreover, Suze Orman says arguing over whether the US is in recession is not as important as knowing that currently YOUR dollars are receding (listen to her commentary here). Her sensible argument is congruent with Warren Buffet’s assessment. Since the purchasing power of the dollar has diminished, groceries, gold, gas, and other goods have accordingly gone up. In the end, that’s what really matters: the purchasing power of YOUR dollars. Instead of asking “are we in recession,” maybe the more appropriate question is “how can I recession-proof my life?’
Copyright 2008, Roshawn Watson, Pharm.D. All Rights Reserved.
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