When is the Next Recession coming?

The short answer is SOON.

Since 1969, recessions have occurred in the US every five years. Based on GDP-Based Recession Index, I believe we are over due for another one.

As defined by the Federal Reserve Bank, a recession is two quarters with consecutive GDP reduction.

Courtesy of Federal Reserve Bank of Atlanta

In the graph above (Produced by Atlanta Fed), it depicts historical GDP data; the grey bars show when there were negative GDP growth or increases in the unemployment rate, hence a recession. I consider the right side of every gray bar as the ending date of that recession(or the trough).

Notable Recessions Since 1969:

1969–9171- Mild Recession

1974–1975 — Stagflation caused by OPEC oil crisis

1980- Caused by energy crisis

1982 —Triggered by interest rate increases

1990 — Depicted as Ronald Reagan’s fault

2001 — High Tech Bubble and World Trade Center Tragedy

2007–2008 — The Housing Bubble Recession

Did you notice a pattern?

3 years + 5 years +2 years + 8 years + 11 years + 6 years) / 7 Recessions = A Recession has occurred every 5 years on average since 1969

The last recession ended in 2009, and it’s now 2017 — an eight-year period, obviously!

The longest period of growth (since 1969) in the US occurred from 1990 to 2001 for 11 years. Assuming that was the highest growth period obtainable; we are 3 years away from another recession. 8 years have passed since the 2009 recession ended.

What does this mean for you?

Invest in recessionary proof financial assets. Such as buying gold or platinum bars, medical (or pharmaceutical) stocks and bonds, children toy companies,etc. Historically, gold and platinum have always done well in recessionary times because they are considered the best stores of value. During the Great Recession of the 1930s, Monopoly was created and is now a household name.

PSA Announcement:

I am not a financial advisor, so take my analysis of the economy with a grain of salt and do your research.