There are always people predicting we are heading into a recession or depression. I saw one article claiming Warren Buffet was ditching all his American stocks, as was John Paulson. One thing to bear in mind is confidence is one of the main drivers of the economy. When people are confident they can spend money, the money flows and circulates through the economy.
Here are a few reasons to be positive:
1. House prices keeping going up and in many markets there is a need for more houses and that means more jobs.
2. The unemployment rate keeps falling. The participation rate has fallen too, but new jobs being created is rising now. With more people working, that means more people to spend money.
3. Gold has fallen. This has been a traditional safe haven when people fear the doomsday economic scenario. This could be a sign people are switching their holdings to stocks and bonds, a sign of confidence in the economy.
4. Austerity as a prescription to fix the economy seems to be losing steam both in the US and in Europe. That means we may see increasing investment in infrastructure which also may create more jobs and more commerce.
There are still plenty of forces at play that can bring about change, but there are homes to be built and jobs being created, so I have difficulty believing a big recession is imminent. More likely we will see continuing strenght.