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Some people see good news and light at the end of the tunnel. I'm still optimistic about entrepreneurship in 2009 and new-to-the-world startups. Some opportunity savy entrepreneurs will manage to turn the change and chaos into incredible opportunities.
However all in all, the overwhelming flood of bad news still outweighs the meager punctuations of good tidings.
What can turn this recession into a depression? In short: continued loss of confidence and trust in the US and global financial system. Any one or a combination of these events ( and prerequisite factors) could trigger it:
1)The recognition that Obama’s stimulus packages and trillion dollar bailouts are having no effect, The mood in the country turns from Obama Euphoria to Obama Disenchantment
2)One or more of the Big Three automakers files for chapter 11
3)Run on banks as financial institutions start to close their doors as the next financial bubble bursts-overextended commercial mortgages or any one of the other 14 bubbles that have yet to burst
4)An unexpected geopolitical event that rocks financial markets and halts global trade (like the assassination of archduke Ferdinand in 1914 that lead to WW1)
5)Unemployment skyrockets in the US hitting one in five or one in four
6)Civil demonstrations and riots break out against governments anywhere on the globe
7)Some US state governments and/or Canadian provinces start to announce or hint at bankruptcy
8)China, Japan and the petro-states loose trust in US treasury bills
9)The US dollar takes a tumble
10)Sudden & unexpected switch from deflation and stagflation to hyperinflation and rising interest rates
Consumers and business owners need to keep a keen watch over all of these factors and what could trigger them. Everyone needs to become their own economist. Trust your gut feel.
Walter Derzko- Wishing everyone a safe and happy New Year!!
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