They have been many talks on the issue of recession prior becoming a reality. Some have said that we were in a recession before it was even announced, others have said the contrary but the truth of the matter, it's all base on how one looks at the issue of recession. If one simply looks at it literally, then we can agree that we are not yet in a recession. Providing that the evidences which support recession in its narrow sense have not met. But if one looks at it on a broader sense, which involves the amount of goods and services that are available in the market in relevance to the amount of money in distribution, then one can say that we are lying to ourselves. As it is the case, the two doesn't coincide.

There are more money in circulation than there are good and services. I know that in school we were thought that inflation is when prices of goods and services go up. Since we are now reeducating ourselves, we've found out that inflation is the consequence of an increase in the money supply. The recession will derive from the fact that they are too much money in circulation.

For example, if I move to Georgia and I want to purchase a home, I need money. Let say instead of money I use gold. To buy one house on block x, I need two pieces of gold. And let assumed that I'm the chief director of the bank. Being that I'm the chief, I removed two pieces of gold in my volt and purchase that home. Let say I got greedy, I saw two more available homes for sale on block x and I want to buy them. But this time I only have one piece of gold left, but I need 4 pieces of gold to buy those two homes. Being that I'm the chief of the head bank, I took 4 pieces of iron and soaked them in gold liquid metal and use them as gold. These 4 pieces of Iron are gold on the surface but not by definition, they true value are worthless. I then used those 4 pieces of gold to purchase those two homes.

Now there are more gold in the market than before, but not all gold in the market are true gold. So in a sense, we can say that there is an inflation of gold in the market. Now let say, I found this trick to work so I used it again to create more gold to give to my friends to buy their dream homes. So now we can say that they is a demand for houses on block x. However, being that there are a presence of false gold in the market that gold is not back by labor good and services.

Now the builders decided to get loans to create more homes on block x, except this time they increased the price on those homes. The builders being unaware of the false gold in the market increased the price on these homes because of demand. Now, there are more gold chasing a few more goods and services which in turns decreases the value of gold, because now you need more gold to purchase just a few more goods at wrong value. As you can see, prices go up as a consequence of an increase in gold, but it is not because the quality of houses increased.

Therefore, we can say that the price of goods and services does not increase in value; it is only the currency which increased in volume. On the contrary, we would expect goods and services to cost cheaper as technology improves for the simple fact that technology facilitate productivity. Therefore, the company's cost would be lower which would cause goods to be cheaper. That's what should happen but we are experiencing the opposite.

With the opposite, prices goes up because there are more gold in circulation than goods and services which then caused people to lose wealth as a result. Cost goes up but your income and I stay the same which caused our wealth to depreciate in value. The only people who truly benefit from the gold are those who received them first, because it will take some time before companies realized that they should raise prices because of this increase in the money supply. So in essence, every time the dollar depreciates in value, we lose part of our wealth, now that made me realized that my business professor and my economic professor at Baruch College were both misleading me into having me believed that inflation does not affect my wealth.

Now, when I talk about recession, this is the picture I have in mind. If you got seek and you go to the hospital, the doctor treat the symptom but neglect the cause, what are the chances you'll get sick again. This is why my instinct kept telling me that they must be a scam going on that's affecting the economy in such a way, because it doesn't matter how much stimulus incentives the citizens received, the economy would still descend as long as good and services are not sold at true value.

Another problem is capital gain tax. Some people argued, if the government lower capital gain tax, it will increase return on investment for most businesses, thereby will provide them with more capitals to invest in the market. Others argued that by cutting capital gain tax, does not necessarily mean that investors will reinvest that capital back in the market. Son now when I research capital, I found that capital does not necessarily mean money. Capital can be a home, a farm, a ranch, a family business, stocks investment or a work of art. More importantly, capital gain tax is the tax applied on the profit after a good has been sold.

I figured if the government lower the capital cost, it would mostly benefit the rich since they have most of the capitals. But what about this increase in the money supply. I suspect if capital gain tax is cut it will place more money in the hands of ownership. That increase of funds would initiate a demand which would cause cost to increase. Providing that increase of funds is reinvested in the state in which it has been cut, otherwise a cut in capital gain tax is meaningless to the country it serves. In some way, decreasing the capital gain tax would cause in increase in price for the simple fact that people would have more money to chase very few good and services.

Another aspect of capital gain tax is that it is tax twice by the government, once for every trades and a second time for the total profit, that my friend is what you called legal rubbery. And even if the government were to tax capital gain once, it would not change anything. They would still be more money chasing very few goods, cost would still go up. The stock prices would increase because of demand; it would not change a thing.

To my knowledge, base on the research that I have done, there are two driven force that affect the economy, and they are Inflation and deflation. Although there are opposite of each other, they both can coexist and cause an effect on the economy. Deflation is described as a decrease in price. It is also described by some economist as a decrease in the money supply which causes price to lower in the market. It is a problem because prices can lower to a point where it causes the system to crash, which is the stage we're now faced with.

One must understand that goods and services are not sold at true values. The value of goods and services reflect the amount of money we have in circulation. Therefore, if you decrease the money supply, corporations will not be able to pay their dept. unless of course you decrease the interest rate on that debt then if that happen someone will lose out. Who will it be is the question? We noticed that President Barack Obama offered a stimulus credit to help boost the economy. The idea is that by spending that money you are helping the economy, which is merely the truth. Just because we spent more does not mean the economy is doing well. It is where we got that stimulus money to spend in the market that matters, and besides some of it will branch out through capital flight.

My suggestion to our president is that he comes up with a strategy to keep the stimulus money in circulation within the country. I know that can't be an easy task because of globalization, but finding a way to increase revenues on our Gross Domestic Product is our only chance. Capital flight is a big problem in this country. As it is known many of us are derivatives of other countries that occasionally send money to our families. When that happens this country lose part of its GDP because that money you & I have in our possession are part of the country's good & services sold to other countries.

As citizens, it is our right to be concern about the stimulus package, especially when we not sure of how we going to pay it back. The reason why citizens are skeptic about this stimulus is because they don't know where it's coming from. Some say that it's free money, others say that it's money lend with no interest which we must pay back when we file the 2009 tax return. Others have indicated that it's money that the Federal Reserve printed which must be repaid. Nonetheless, no matter how one looks at this issue, the truth prevail, inflation is decreasing the value of our currency and what will our money worth in years to come is undeniable to think in terms of worthless than valuable. We can only blame ourselves for we're the one who have taken substantial amount of loans which can't be paid back; in that case, we need to change our spending habits.

As the national debt continue to increase above the $45 trillion, we starting to see prices of some financial stocks, commercial stocks and homes depreciating in value while necessities like oil, natural gas, health insurance increasing. That is the dividing factor between the super rich and the poor. The fact that both inflation and deflation can co-exist will caused the dividing factor to widen and as a consequence shrinking the middle class.

If you really think about it, in theory a company’s earnings and revenue should increase at the same rate as inflation over time ... but that is not what's happening. What is happening is that inflation increased while earnings and revenues struggled behind causing accumulation of debt. That is why many more companies will continue to lower their spending and investments as a mean to balance their budget.

Some companies know that they're going to fall, but the question is from how high? No company wants to fall ... therefore, they look to borrow to maintain. When the amount borrowed exceed the total cost of operation, profit is not possible, they stocks began to depreciate in value which led them to be acquired through a hostile takeover. If you really think about it, this is a system that is set up to transfer wealth over to those that are already super rich.

Once you become aware of these factors you began to ask yourself, why I should be interested in buying a home when it's no different than gamboling. It seems like the best option is a short term investment where one can make a quick dollar and get out. Because realistically speaking there is no guarantee under this system, everything is a risk. However though, some other organization seems to have a solution to this bubble that may bust at anytime now.

Those organizations are in the business of selling mutual funds that are back by gold and silver. You can deposit your money for gold with a 3 to 5 percent interest rate which does not seems to be a bad idea. Hard asset investment is more secure said Ron Paul because when you look back in history, you'll noticed whenever the gold standard was in effect the economy prosper. Nonetheless, we cannot say for certain that the gold standard system is scam proof but what is true is that it's harder to counterfeit as oppose to paper money.

It would be nice again to see if we could secure our currency by placing it against hard assets values, but unfortunately we have too much debt for that to even be possible. Perhaps we can secured it by matching it against labor, but how would it be done is the question? Maybe a different system must come into play, one that is more secure and scam proof if such thing exists.