The Chances Of A Recession In The Next Two Years Are “Extremely High”

by | May 15, 2019 | Forecasting, Headline News | 11 comments

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    Chief investment officer Jeffrey Gundlach of DoubleLine Capital sees the chances of a recession within the next two years as “extremely high,” he said on an asset-allocation webcast on Tuesday.  Gundlach says there are obvious weaknesses beginning to become visible in the United States economy.

    Gundlach says what other economic analysists have also said: there is going to be a recession, but we should all have sufficient time to prepare for it.  We should all be getting better at seeing the writing on the wall at this point.  Gundlach claims there’s only about a 30% chance of a recession in the next 6 months, however, the likelihood of a recession in the next 12 months (one year) jumps to 50%. But the probability of a recession in the next two years is “extremely high.”

    This is good news and bad news.  It’s good for those who want to take initiative and prepare for the eventual economic meltdown, but a recession is obviously some pretty bad news too.  But we’ve said this before: you have time to prepare, and finances are often the hardest thing to get in line for some Americans, and it takes longer.

    According to a report by Seeking Alpha, Gundlach also sees about 70% chance of a Fed rate cut over the next 12 months. Furthermore, he sees the bond market “extremely exposed” to a decline in the U.S. dollar, because some foreign investors have been buying Treasuries without currency hedges.

    The economy has not been growing on its own, rather, it has expanded largely because of a debt scheme as the U.S. increases spending and fuels deficits beyond expansion in output. This debt scheme will have a disastrous effect in the near future, however, as this spending will eventually fling the U.S. economy into a “death spiral.”

    The best way to prepare for a recession is by getting your own personal finances in shape. A book that’s been a great resource for anyone regardless of their income is Dave Ramsey’s Total Money Makeover. Other resources available could help too, but Ramsey’s plan will work for almost everyone, is the most universal and easy to follow.


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      1. We have two years…….I thought that was two years ago.

      2. No No No that was two years before that. Come on get your disasters straight we had the recession right before Yellowstone blew the last time or was it when the asteroid hit I keep forgetting
        prep on dude and get me another beer.

        • Smithwick ok?

          • Make mine Sam Adams. And thanks for another article by Captain Obvious. How would anyone have known otherwise?

            • SA is good beer but the SmithWick is smooth.Brewed by Guinness.

      3. Yep, it’s always right around the corner. Thing is, recessions are good. They are the economic equivalent of stopping to take a breath. Lots of little recessions prevent big depressions. An economy can’t run wide open all the time just like a runner can’t sprint for an entire Marathon without having a heart attack.
        Recessions are part and parcel of a free market economy. They may be inconvenient but like a doctor visit, they ward off worse events.

        • As the runner is not fleeing away from danger or toward anything vital, the race is ultimately a fool’s errand. In more-decadent times, they like to make the athletes wear funny clothes or be naked.

          Runners, horses, and race cars fail, in the short term, but the idea persists. The clock is allowed to run, the venue stays open, and holds another event, with new ones to take up the slack.

          For so long as there are noble lies, hopium, and incontinent breeders.

          All of these people hate abstract thought like the pearls cast before swine. Make no mistake.

      4. If you don’t think that Mid East peace (in this umpteenth try) will start the Great Tribulation…

        You could invest in too-big-to-fail, household names, ahead of QE.

        You don’t literally have to consume or even like this crap or promote it, out loud, or spend your own money in an investment at retail level.

      5. Things a little slow on here today. Got some bee’s wax coming and plan on gathering some jewel weed and plantain to make some salve to keep in my kit and around home. I’ve ran out of the last batch during the turkey season here. Went to jump a stream and was airborne and knew I wasn’t gonna make the other side and landed in part of the stream and a pile of blackberry brambles. My son came running over cause he heard me cussing and laughing but did help his Pap outta the brambles and water.

      6. The Mid-East IS where the great trib. will end. Don’t know where it starts. Maybe here. What is your point? It is coming… like it or not. Might as well make a buck. Might ease your family’s suffering… being without the mark of the beast and all.

      7. Recession next year? Probably.

        Only sure thing at the moment is a stock market crash this September/October, starting the first day of September with a dead cat bounce on the last Friday of October. If the deadcat bounce is weak, more down down down after that. Either way, a recession after that, just a question of how severe and how long.

        No matter what, it will have an effect on the 2020 election. Severity depends on what DT does. Could oust him if he does the wrong thing. The good thing from his perspective is that he will have a year to prepare instead of days that the Republicans had in 2008.

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