In the literally dark days of the 1974 recession the lights went out and I remember a job my father got me to do, "Keith, go and light these paraffin lamps and candles, oh and make sure we lock the doors if the lights go off"!
Each week we had to plan how to get every available light source in place to ensure customers in his store could see us and the merchandise! Oh and we locked the doors so they didn't walk out without paying!
It was the era of the 3 day week, power on and off sometimes without warning, Government taking on Unions and frequently coming off second best and people losing jobs by the thousands every week. This recession saw GDP fall by "only" roughly 3.5% over the piece.
What then are we to make of this observation in the week that Bank of England and Prime Minister alike uttered the R word?
Charlie Bean, BOE Deputy Governor of the Bank of England, said last week:
"This is a once-in-a-lifetime crisis and possibly the largest financial crisis of its kind in human history. In terms of the impact on the real economy we are still in early days."
Wow Charlie, so it's even worse than 70's recession which was a diabolical period for the UK economy? Even worse than the great Depression? Even worse than Japan's "lost Decade"?
Extrapolate that statement further and Charlie Bean thinks we are in for a hell of a couple of years from 2009-2010. Yes the UK saw 0.5% drop in GDP last quarter (quarter ended September 2000) but to be worse than the recessionary period of 1980-81 we will have to see GDP fall by 6% MORE to even equal that awful recession when GDP fell 6.5%.
No economists that I have followed recently expected 0.5% drop in Q3, far less 6.5% over 2-3 years!!! So does the Bank of England have a better crystal ball or is Mr Bean just plain scared because he has not seen a recession before?
Either way I am VERY WORRIED, reading Sunday papers today, a couple of older and wiser economists and former senior industrialists recounted their memories of the last recession. Blimey I must be very old being able to remember that 1974 story? That's 3 recessions or make that 4, that I have seen. Maybe time for a lie down.
Look I have been saying for 12 months or more on my websites and blogs, things ain't going to get better they will get worse. Accusations of scare mongering were made against me in 2007, but we have been telling businesses for over a year, get the tin hats on and try to survive.
Boring and repetitive end to another Blog post but make sure you have a plan to survive "this once-in-a-lifetime crisis and possibly the largest financial crisis of its kind in human history".
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