The Stock Market Is Broken! Here's What You Should Do To Prepare.

In my last post, I wanted to ensure people understood the Monetary and Fiscal policy tools that can be used to help us out of the Covid-19 recession (or probable depression).

Today, I want to turn my educational post to the definition of what it means to be in either a recession or a depression:

Recession: a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Depression: an extended recession that has years, not quarters, of economic contraction.

For context, there have been 33 recessions since 1854. But the more relevant period to look at are the 11 recessions since 1945, the end of the Second World War. The average contraction period for those 11 recessions was 11 months from peak to trough. And it took, on average, just under 5 years for the expansion phase to play out post-recession.

For additional context, there has only ever been one depression, The Great Depression of...

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