What Causes a Deep Recession?

Описание: Ken Fisher, Founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments, gives his thoughts on why recessions happen and what makes some deeper than others. Ken frames the conversation by stating that the cause of a recession and how deep it is are two different things.

On one hand, he explains that recessions are often triggered by something the government has done. For example, the Financial Accounting Standards Board’s mark-to-market accounting requirement—that went unnoticed by everyone, including Ken—caused our last business cycle recession. Businesses were forced to write down assets on their balance sheets to market value, wiping out trillions of dollars from the economy.

On the other hand, Ken states a recession’s severity is determined by how much excess has built up inside the global business world over the years. In Ken’s view, this includes issues like nonvisible debt, greater bureaucracy, decayed plant capacity and more that need to be purged so a new, solid foundation can be built for the next economic expansion.

Ken Fisher writes monthly, native language columns in major media organs around the world. In total, Ken Fisher’s 31 bespoke columns span more countries and more languages in more total reach than any other, non-syndicated columnist of any type ever. For more of Ken Fisher's thoughts on the markets, visit us at https://www.fisherinvestments.com.

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