Double-Dip Recession – Whatever Happened To That?

double-dipWhat ever happened to the Armageddon-style Global Financial Crisis Mark II.

You know the one… The double dip recession that we were meant to have.

The end of America…. leading to the end Europe and the the euro zone.

Which would bring China down and lead to the end of prosperity as we know it here at home in Australia.

I’m still waiting… But as yet, nothing.

Have the doomsayers got it wrong? Have the press over cooked the fear mongering? Is the world in a far better place than even most economist realise?

Speaking of economists, 14 out of 15 of them punted on the RBA lowering rates yesterday. They were wrong.

Keep reading to find out why…

I’m not an economist, so I’m not really qualified to answer any of the above questions, but l invest my hard earned money and have done OK over the years.

So let me have a crack at what I believe is going on and why, if your serious about making money in 2012, you need to pay attention.

For the last 6-12 months we have been lead to believe that the Euro zone would create an almighty thud and bring western civilization down with it.

First, Greece would go, then Spain, then Portugal, then France and eventually Germany.

But what happened instead, the world’s largest economy the Euro zone actually saw an increase of 10% in corporate profits in 2011.

Yes it had issues, lots of them…

But in a weird way, those weakness once sorted out, will become their strengths as the whole region becomes more fiscally responsible.

The euro will not go into recession. It will grow by a modest 2.0% GDP.

This is a miracle in itself if you believe all the bad news that is out there.

But what of Greece, today being yet another D-day on whether they will or won’t default.

Here is what will happen if they do default (unlikely). The equities markets will fall for a day or two and then reset for what is to be a great year for the stock markets globally…

Especially right here at home in Australia.

Most smart folks have factored-in a Greek default and if it comes, no one will be surprised or shocked.

Don’t get me wrong, the Europeans have lots of issues to address, but with the back drop of a stronger global economy lead by the US recovery and even stronger China, Asia and Latin America… It will have the time to sort out its issues.

Again, the RBA recognizes this and did not lower interest rates.

Speaking of the US, it will be a star performer in 2012.

The numbers are not out yet… but the old US of A is on the rise again.

It is showing stronger consumer confidence, consumer credit, stock levels at record lows, jobs improving and increasing.

… All of this leading to a great year for them.

Plus add to that huge piles of cash sitting on the sidelines, a slight change of market sentiment will see a flood of equity and broad global markets buying in.

So what about China? We keep reading and hearing how their growth can’t last and they are on the brink of a collapse of gigantic proportion.

The latest data showed an amazing 9.1% GDP growth in 2011 and true predictions are for a “slow-down” in 2012 to 8.9% (very funny).

Sorry. No slow down, no almighty crash and no double dip recession.

Consider that the Europeans will be fine and the US is in the early stages of recovery, the Chinese will benefit even more in a stable and robust global economy.

So what am I doing?

Well, I have been on the sideline with the equity markets for a long time, but now l am a buyer.

My prediction is that it will be a great year for our stock market right here in Australia and if you do a bit of research and homework, you could make a lot of money this year.

Don’t believe me..?

Well take a look at a chart of the stock market for the first month of the year…

It’s up 7%.

Haven you noticed?

The trend has already started; most investor will miss it and probably get in when it’s too late.

Don’t be that person.

So, what’s your view? Do you have one?

If you don’t, you’ll fall into the view of “general consensus” which in this country, is whatever the media reports.

I have to admit, l am not a big fan of the stock market but l like making money and getting on a trend when l see one.

Also, l keep in touch with the overall economy as a whole and the markets are a great place to see in an instant what the sentiment of investors is and where money is moving.

Add to that, l do a fair bit of real estate investing and recently have discovered a strategy that is going to create an insane amount of cash-flow.

In a funny way, the stock market is a leading indicator on the longevity of that cash-flow in the real estate market.

Hey, while I’ve got your attention…

If you would like to know exactly what my #1 real estate focus and strategy is 2012 then l suggest you attend Growth and Cashflow 1- Day training event with Dymphna Boholt.

Here’s how you do that:
http://growthandcashflow.com/200tickets

It’s a great event in general, lots of new information added and also a session on my killer money making strategy for 2012.

Which ever way you look at it, 2012 is going to be a fantastic year if take action.

Don’t be a spectator – get involved.

Here’s what important, you MUST do your homework, research, due diligence and get educated.

…only then can you make an educated decision on what is the best step for you moving forward. It’s time to take responsibility of your financial future.

Don’t leave it to anybody else, it’s your life, your money and your journey.

The media has got a lot to answer for, however those guys are only doing their job. But if you are influenced by them, you are robbing yourself of an empowered future.

Signed with Success,

Jon Giaan
Knowledge Source

P.S. Look, I’m in on a lot of fronts. I won’t be buying the general index, I’ll be looking to pick the eyes out of it and look for individual stocks that I think will benefit from this new shift in sentiment.

P.P.S. What do you think is going to happen and rather than being negative, tell me about what you’re doing to either take advantage of this trend or protect yourself from the contrarian view that we’re going to see another major recession.

Post your response below.

Comments

  1. says

    It is refreshing to read articles that tell of how we can still succeed despite the GFC gloom and doom news.

    It is not what happens around us but our mindset and attitudes that determine our results in investments (or any other endeavour).

    Thanks for reminding your subscribers about that point.

    I see this time as an opportunity to invest rather than fret and worry about what the “experts in the news” have to say about the global economy being under siege. *Yawn*.

    So, do your own research, be clear about what you want to achieve, take a deep breath, feel the fear and do it anyway!

  2. Michael Hilton says

    I HAVE ENROLLED IN YOUR 1 DAY WORKSHOP AT THE GOLD COAST. I dumped some money into the australian share market last year and have cash sitting on the sidelines at the moment wanting to invest in property. I am awaiting your workshop in February, in the meantime I have been researching local and US property markets.

  3. says

    While everyone cries ‘recession’ and ‘global downturn’, it is our job to work within each of our own circles of influence, and push forward.
    Given the resilience of human nature, and that companies always seek to make money, there is no way that we (this world) is going to stay down. Given Gian’s stats, without even checking, I’m not surprised. I simply believe humans will move upwards everytime.
    Hence, don’t let anything get you down. Keep pushing, forwards and upwards
    Cheers
    Mel

  4. Roger says

    Thanks, Jon! I think you are spot on. I’ll let you know when I’ve done my due diligence on which shares.

    In the meantime, Oz was supposed to be running a 150,000 homes housing shortage. How can real estate possibly be going down, here? US yes maybe but not Australia, surely?
    Best,
    Roger.

  5. Rob says

    I am interested in your comment rearding “cash sitting on the side lines” – where is this cash and are we talking about institutional type stuff, or mums and dads… just a guage of how much and what impact it could have?

  6. says

    Australia appears to be moving into a recession as firms and gov. retrench staff and their consumerism declines. There are othe changes eg firms are closing eg a glass factory, heinz has moved a branch to NZ and people are moving to buy on line. The major banks may not be as healthy as they seem for they have borrowed at high rates from overseas sources while local borrowing including mortgages ave declined. Federal borrowing is at an alltime high as fed. income tends to come under pressure. Overseas investors will soon find it viable to exit Austraslia as the USA and Europe find ways to bypass their seeming financial woes and move on.But this economic change in Australia will present opportunities for some.

  7. Maria Teresa de Freitas says

    Hi , Jon !
    Interesting. Yes, I choose to be positive , and actually, I already booked to attend ” $GROWTH & CASH FLOW ” on the 15th February – 1-day intensive – since, January. I’ll take a lady friend too.
    So, let’s make decisions and, to get involved with DY MPHNA BOHOLT !
    See you then!
    Cheers !

    M T DE FREITAS

  8. malcolm says

    Hi Jon
    In reply to your email, the US economy will crash, there is no recovery, they have managed thus far to delay the inevitable , the US is so far in debt that they can’t recover, they are going further into debt every day by the tune of 15 billion dollars a day, when they go they will take europe with them and then the rest of the world
    cheers
    malcolm

  9. TeZ says

    Sorry Jon, I couldn’t disagree more about this article.

    I’m not a Doomsayer, I’m a realist and Malcolm (February 8, 2012 at 4:56pm) is spot on.

    The reality is, that the US of A isn’t getting better and neither is any other economy.

    Why?

    Because no one has actually fixed anything, is why.

    Sure they’ve found new ways to conceal the problem by hiding debt in the shadow banking system, but nevertheless the debt is still there and growing day by day.

    So, nothing good is actually happening in the financial sector, trust me.

    It is going to crash and burn very very badly and you don’t want to be near it when it does.

    The only safe measure I can see is investing in Gold and Silver (Silver particularly)

    I have already done so, so I’m not just talking the talk.

    Good luck with anything else you may want to through you money at.

    I’m going to be stacking Silver from here on in…..

  10. says

    Hey I liked your take on what is going on in the world economies. I see you are looking closely at the numbers. Im no economist either but have you seen the massive amounts of development China has with its un affordable high rises which are 60 times the average annual income in the country.

    They have ghost cities (Yes not just one) to hold 17 million people which no one can afford.

    I understand there is an emerging middle class but this is ridiculous. they are already falling apart.

    I dont think this is real growth. They are just building to sustain it and when they cant sustain it they will stop buying our resources which will have a flow on effect to all areas of our economy, brining it down with them.

    Good to see another point of view. Ill take it in but ill keep being weary when buying property until our economy crashes then ill clean up the bargains!

  11. nick says

    Just an added view point on why the RBA probably did not pass on rate cuts.

    The BANKS would of pocketed most of the benefits from the rate cut and not the struggling consumer. So why bother when its desired impact would of been diluted.

    It made sense to hold back until such a cut could be passed on with the desired benefit to the end borrowers or come up with an alternative plan.

    As it is, the banks are now talking of increasing mortgage rates not with standing the RBAs decision.

  12. Glen says

    I agree John, it is not all gloom and doom.
    However whenever there is a shakeout, the best in class survive.
    What put us in trouble was we all borrowed too much when things were good.
    As Buffett says, downturns are like swimming at the beach, when the tide goes out you find out who was swimming naked.
    As people and companies deleverage banks will have less loans on their balance sheets and will be throwing money at us again. Many $ will vanish off balance sheets as people pay off their debts. The companies that will flourish are those with little debt, and those who can set the prices of their products with little competition. I do like our big miners, energy stocks, and staples.
    We are also very lucky to have strong immigration which will help drive our economy and sustain the housing market. The glass is half full.

  13. Garry Scarf says

    I’m doing OK thank you. DO NOT EMAIL ME AGAIN> I am attending your lecture series in Sydney and do not need softening up! GES

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