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Ten reasons why there won’t be a double dip

Sorry about that. Really depressed meself with all that doom and gloom about double dip recessions and, for regular blog readers, you know that I like to take both extremes in an argument so here are 10 reasons why the double dip won’t happen:

1

Double dip implies a global second recessionary wave, but this won’t be global. America’s continuing stimulus of the economy will mean that the USA will turnaround next year. Asia is buoyant anyway, so the double dip will only occur in Europe, and particularly in countries implementing “austerity measures” which means France, Germany and the UK may be at risk.

2

The first dip was not as deep as it should have been, thanks to the government intervention early in the game to provide economic stimulus through quantitative easing. If there were to be signs of a second dip, governments would once again cushion the impact and therefore it would only be a little bit of a downer but not a big, deep recession like the last one.

3

Consumers and businesses have survived well through the past two years, house prices have dipped but not crashed, and unemployment increased but has not burst the barriers of calamity. This means the spending in the economy is still pretty strong and won’t result in an internal crisis of confidence through lack of spending and investment by citizens and corporations.

4

Sovereign default has been murmured here and there, but there is no chance of sovereign defaults. The European Central Bank and European Commission have made clear that this just would not be allowed to happen, which is why there’s €440 billion in the European Financial Stability Fund.

5

Asia’s economies are still thriving, regardless of the issues in Europe and America, and potentially the economic shift from reliance upon the US economy to keep the world afloat is less important than it once was. As a result, this decade will see a leaner economic outlook in Western economies, but no nose dive as Eastern economies smooth out global recessionary issues.

There you go.

That’s ten reasons why there won’t be a double dip.

Pardon?

That’s only five reasons?

Don’t you know who I am? I’m an economist.

Therefore, for a double dip to occur, you have to double these reasons why it won’t.

Twice five reasons makes ten.

That’s why they call us a confusion of economists, because there are three types of economist: those who can count and those who can’t.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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