Warnings of an imminent recession in the UK – and perhaps the US – are coming thick and fast.
In the UK, the National Institute of Economic and Social Research (NIESR) has forecast that gross domestic product (GDP) will fall by 0.2% in the third quarter and 0.4% in the fourth quarter of this year. Two consecutive quarters of contraction is a commonly used definition of recession. The NIESR thinks that up to one million people in Britain could be living in ‘destitution’ over the next 12 months. In the US, both Main Street and Wall Street fear that a recession is on the cards.
The chairman of Tesco, the UK supermarket giant, has warned of there being “real food poverty for the first time in a generation” in the UK. The Trussell Trust, a UK charity that runs food banks, says that during April 2021-March 2022 it distributed 14% more emergency food parcels than in the same period of 2019/20, at the height of the Covid-19 pandemic. In the US, currently 12% of the population are struggling to afford sufficient food.
For most people recessions have little to do with GDP figures – they are rather times when unemployment grows, wages fall behind inflation, and there’s a downturn in investments.
When recessions loom then batten down the hatches against the financial tornado. Make a financial plan; try to live more thriftily; try to accumulate a few months’ financial ‘cushion’; avoid taking on unnecessary debt; if you have spare wealth, invest it in something that is likely to keep its purchasing power and provides immediate liquidity – such as gold with Glint.
At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
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