The Real World Consequences of Recession Talk

September 7th, 2011 - By TheEditor

(USA Today) — Feeling glum? Unsure of the future? Putting plans on hold? Hoarding cash and buying gold?   Chances are your negative state of mind has a lot to do with the double-dip crowd’s Weather Channel-like warnings of another catastrophic economic storm bearing down on the USA. The drumbeat of recession talk, which gathered steam Friday after the government reported that the economy created no jobs in August, has all but cemented a recession in the minds of investors — but not necessarily the type that is measured in negative GDP, ever longer lines at the unemployment office or shrinking output at factories. At least not yet.  Instead, the gloomy predictions about the economy, which is now operating at stall speed, is causing a different type of contraction: shrinking confidence.

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