surviving the recession

Today came the news that Japan has emerged from recession, following closely on Germany and France coming out of recession. Australia emerged from recession in the first quarter.

So is it all over? I’m not so sure. I think that what we’ve seen is an inventory correction. Retailers panicked in the last quarter of 2008 and first quarter of 2009 and stopped ordering new stock, and hastily sold what they had in massive sales. They didn’t want to get caught with stock they couldn’t sell. Therefore Japan and Germany, both large exporters, had a severe contraction in Q408.

But since then, retailers are carefully restocking. And that’s why we’ve seen Japan and Germany rebound. But will the rebound last? Only if there is sustained restocking by retailers. I’m not altogether sure there will be sustained restocking. Unemployment in the USA is still climbing, and the USA remains the engine of world growth. If their people can’t afford to buy much, then growth in Germany and Japan will stall. It’s not over yet in my opinion.

What implications does the weakness of the pound have? Well, for us British bloggers, it’s a boon, a massive relief. All online earnings are in dollars, whether or not you are working for an American firm (the European and Australian online orgs pay in dollars too), and the strong pound from 2005 to 2008 was killing us.

I remember the days when the £ climbed from £1: $1.85 to £1: $2.11. You had to earn 14% more just to stand still. But the current fall in the value of sterling has been a massive relief. Sterling now stands at £1 : $1.36. Which means that for those with dollar earnings, we’ve gotten a 32% payrise since summer 2008. I don’t know how long it will last, but we should try to earn as much as we can while the going is good!

Barack Obama finally got sworn into office today. It seemed an age coming - in the three months since he was elected, markets have collapsed, banks have been taken into public ownership, unemployment has soared, tax payers money has been flung around like it was confetti,  and businesses have collapsed.

Things can hardly get worse, so it could be said that today is the start of the recovery. Obama’s presence in the White House should surely cheer up the population and raise confidence. And the raft of measures he has got planned should surely kick-start the economy. Let us all hope so.  The last time the world faced a deep depression, it only recovered after a world war broke out nearly a decade after the recession started. With some luck, this time it will be different.

A reminder to all those who file their tax returns online: the deadline is 31st January and if you are late, you risk a £100 fine.

It’s probably best to actually do your return this week rather than leave it to the last minute. Last year, so many people tried to file their return online on the very last day that the Inland Revenue’s website crashed, and loads of people were left unable to file.

Save yourself the bother and do it this weekend. That way, if something goes wrong, you still have time to phone the help line for advice and time to make another attempt to file.

It’s that time of year again, when we set our goals for the year. Given that we are in the midst of one of the most severe recessions in living memory, the number 1 resolution for most people is to reduce their debt, and number 2 will be to increase savings.

There are several articles on this blog that will help you do just that - click on the categories in the sidebar for ideas on how to earn extra money and how to use this money to pay down debt. I would advise people to look at the shopping and budget categories for ideas on how to save money on shopping and how to reduce expenditure.

My personal New Year’s resolution is to make this blog the number 1 resource site for those who are looking for ways and help to get through this recession.