Economic Cycle

I have recently been reminded about a video by Ray Dalio that explains how the economy works and watched it again. It explains in easy to understand language how the economy works and was put together a few years ago to explain what happen to the economy during the last recession.

Ray Dalio is an Hedge Fund manager and founder of the investment firm Bridgewater he is one of the wealthiest people in the world and therefore he is a person who should be listened to. People have a look at the video and let me know what you think.

After watching this video it reminded me to have a think about where we are in the current economic cycle. It has been about ten years since the last recession so we are getting to a point where we should be expecting and new recession or pull back.

The big worry is that a lot of people, companies and governments have taken on a lot of debt since the last recession. This may mean that if there is a downturn in the near future that people, companies and government may not be able to withstand the recession especially when there have not been big rises in income.

One of the things that I think points out that a recession maybe in the near future is that asset prices have increased including stocks, housing and bonds. In the UK there have been recent articles that 100% mortgages are once again back. This usually is bad news.

I will write a longer article on this at some point in the future but I really wanted to remind people about this video and to have a think about where we are in the current economic cycle. I could be totally wrong and a recession could be far away but as we seem to currently be in the good time from and economic sense it is a wise idea to prepare now.

Let me know what you think via the comment section or on our facebook page.

The Normal Person

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