Jeff Bezos on the State of the American Economy and How People Should Get Ready for a Downturn
In an interview that took place the week before last, CNN spoke with Jeff Bezos, the founder and former CEO of the retailing giant Amazon. He discussed his thoughts on the impending recession in the United States economy as well as his recommendations for what individuals and smaller businesses should do.
In response to a question on whether or not the United States is now experiencing a recession and what advise he would provide to small companies, the billionaire who currently serves as the executive chair of Amazon issued the following warning:
The current state of the economy is not very encouraging. Things are beginning to calm down. Across the board, in virtually every industry, people are losing their jobs.
While he did concede that he does not know "whether we are technically in a recession," he emphasized that "the probabilities say that if we are not in a recession right now, we are likely to be in one very soon." He did this by pointing out that economists have argued over whether or not the United States is currently in a recession.
Bezos advised everyone, particularly owners of small businesses, to "take certain risks off the table," and he continued by saying: "My recommendation to people."
If you were planning to make a purchase, I would suggest that you take things a little more slowly than usual. Maintain a stock of dry powder, pass some time, and observe the situation. Make an effort to lessen the amount of risk involved in either your business or your life.
"If you are an individual and you are considering purchasing a television with a huge screen, you should probably hold off on making that purchase, preserve that cash, and see what happens. "Same thing with a refrigerator or a new car, anything, just take some risk off the table," was Bezos's advice to his customers.
"If you run a small company, you might want to put off certain major purchases for a while... Keep some cash on hand just in case. In the event that we experience even more severe economic difficulties, that company's chances of survival might be improved by taking even a little amount of precautionary measures. The executive chair of Amazon stated that a certain amount of "playing the possibilities" was necessary.
Bezos was also questioned over the potential length of time that this economic downturn may continue. He answered by saying, "I don't think even the most experienced economist in the world could answer that issue," and went on to elaborate as follows:
You simply need to give it your best effort to be rational about it, remove as much danger as you possibly can from the situation, and then "hope for the best but prepare for the worse."
Bezos made his remarks in October in response to David Solomon, the CEO of Goldman Sachs, who had stated that there is a good chance of a recession. The tweet that the executive from Amazon sent out at the time read, "Yep, the probabilities in this economy tell you to batten down the hatches."
A recent poll found that 98 percent of chief executives are getting ready for a recession in the United States. Some people, such as the well-known investor Jim Rogers, are anticipating a severe economic downturn, and he thinks that this recession will be the worst one he has seen in his lifetime. Economist Peter Schiff issued a warning that the actions of the Federal Reserve could result in the collapse of financial markets, a widespread financial crisis, and a severe economic downturn. However, the White House is not making any preparations for a possible economic downturn. Recently, Vice President Joe Biden asserted that the economy of the United States is "strong as hell."
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