The recession is an effect of an economic crisis based on the large unbalance on the Planet overall sustainability. When a person works too much and he doesn't provide the needed rest to his body not paying attention to the body signals as stress, or minor aches, then the body develops a flu or an illness that send the person to bed or may be worse, to the hospital or to a surgery. So, the patient has gotten obligated rest to restore the balance lost on his extreme economic production effort.
The same is happening with humanity today. We haven't heard many signs of depletion of natural resources. For decades many governments and leaders denied the global warming and the climate change. Today most of us are beginning to realize the chaotic effects that Nature will cause to the human civilization to restore in part the sustainability.
So, the present recession is just one small flu or a cold attained by humanity to pay attention to stop the depletion of nature. Then the recession is most likely a "cold" or a tool to happen again and again until the civilized community carry on a more balanced pattern of development. A "cold" to diminish our global warming of natural resources.
Then clearly, the value of many assets is going to change. The value of companies is going to change. The value of wealth or what is understood for wealth is going to change.
While this happens, there is no doubt many will hold to one of the long term definition of wealth: Gold.
So I foresee a strong demand for gold. Not just for financial reasons, but most importantly due to economic reasons. Our financial crisis is just the sneeze of the cold gotten by humanity. It is not the real illness.
Humanity is ill of unsustainability. The civilization is ill of that. So, General Motors, banks and companies based on the XX century pattern are going to diminish its value permanently. Unless they reinvent themselves becoming a real new companies offering solutions to the new economy emerging in between the giants of the past. Otherwise they are going to die. Nature tores down the old beautiful and productive trees, once they are not any more productive. They become rotten and the winds of nature destroys them to assist the growth of new trees. So, this recession is going to destroy some extraordinary and productive mammoths, to leave room to the new ideas to the new generation of creative people.
New and old investors are needed to fund the new trends, so we may have a more balanced development. Gold is just a tool to avoid some hard looses during the turmoil of changing the value of world assets.
I don`t want to extend this post more, but the causes of this recession are totally different than the World Depression of 1929-30. So, the cure of the illness is totally different.
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