Everything in our lives operates according to the natural cycle of life. Some call it Yin & Yang but to everything there is a season (turn, turn, turn). Babies are born, they grow up, they mature, they grow old and then they die. All things in life must follow these simple rules of nature, there are no exceptions.
Our economy follows these same natural laws. There are the “Boom” times where we experience growth and expansion (the good times). Businesses are expanding making capital investments, increasing advertising budgets, wages are rising, people are buying cars, taking vacations. “God is in His Heaven and all is right with the world.” This is inevitably followed by the “Bust Cycle.” As I have said previously, trees don’t grow to the sky and the good times don’t last forever. After a period of strong and sustained growth nature resets the scales as a way of balancing things. Alas, into each life a little rain must fall.
Next comes “Recession” (or as I like to call it, Death). This is a stagnant, slow growth period which everyone is cutting back on spending because there is uncertainty about the future. You can see the lights flashing on and off and someone is telling you to “go home, the party’s over.” This period of recession is the release valve that allows the economy and the people in it to regroup and get their house back in order. It’s usually this time of low expectations that enables us to pull ourselves up by the bootstraps and rethink our priorities. The misery of recession eventually leads back to the gradual economic “Expansion” and another period of initially gradual but sustained growth.
Following this cycle back to its origins, we enter into yet one more “Boom” cycle where we seem almost destined to repeat all the same mistakes we made before and possibly to think up a few more we might have missed the first time around.
It’s not a good thing; it’s not a bad thing. It’s just the way it is. There’s no point to fighting nature, nature always wins. But, it does make sense to align ourselves with these forces to be able to see what’s coming or else run the risk of being blind-sided by the “Bust” that is right behind it.
Add A Comment