Whenever the next recession does arrive, what we know today is that it is unlikely to be a "normal" recession, by the standards of what most people have experienced in their lifetimes.

In this analysis we will compare and contrast the characteristics of an average recession based on 164 years of history, versus what has been experienced in the United States since the end of World War Two. For most of the modern era, we have experienced unusually short and infrequent recessions, specifically because of how Federal Reserve interventions have changed the business cycle.

The issue for investors in general and retirement investors in particular, is that the Fed is trapped inside of a box of its own making, and it appears highly likely to enter the next recession without the necessary tools to exit that recession in the way that most people now take for granted.

What history shows us is that lacking those interventions, recessions become more frequent, average recessions become much longer, and the average investor - and retiree - is likely spend twice as much of their lifetime in recessions.

Indeed, as explored herein, what 164 years of economic history show us is that the so-called "Great Recession" of 2007 to 2009 was not an aberration, but was merely average. If the United States were to return to the long term averages for what recessions have been when the Fed lacks the necessary "ammunition" to quickly exit a recession - then we could expect a new "Great Recession" about once every five years. This then has potentially extraordinary implications for future

As explored in a previous analysis in this series (linked here), over the last 164 years we have seen 34 cycles of recession and expansion in the United States. This business cycle could be likened to the natural cycle of nighttime and daytime: the sun has gone down 34 times in the form of recessions, and the sun has then come up 34 times in the form of expansions.

However the since the end of World War II we have seen a quite different and visually obvious change in the frequency and duration of recessions versus expansions - the green areas of expansion are "fatter" and of longer duration, the gold areas of recession are thinner and less frequent.

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