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A Brief History of Recessions in the United States
Episode 1043rd August 2022 • This Shit Works • Julie Brown
00:00:00 00:13:10

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A rising number of financial experts say the US is headed into a recession. By looking at the history of recessions in the United States what we learn is that they are a natural, yet unpleasant and sometimes painful, part of the business cycle. 

Listen in as I take us through a brief history of the 12 recessions in the 20th century and the three to date in the 21st century; what caused them and how long each lasted.

Drink of the Week:  Depression Glass Cocktail

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A rising number of financial experts say the United States

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is heading into a recession.

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By definition, a recession is two sequential quarters with a significant

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pervasive decline in economic activity.

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There have been 11 recessions in the United States since 1948.

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averaging out to about one recession every six years.

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Welcome to episode 1 0 4 of this shit works a podcast dedicated to all things

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networking business development and relationship building i am your host

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julie brown and today i'm giving a brief history of recessions in the united states

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This episode is sponsored by nickerson A full service branding marketing pr and

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communications agency With team members in boston los angeles miami and new york

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city Visit them At nickerson c o s.com.

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Recessions are typically marked by widespread layoffs.

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Bankruptcies.

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Higher borrowing costs and turbulence in the stock market.

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That was last two.

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We've already started to experience those with soaring inflation and the

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stock market experiencing its worst.

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First half of the year since 1970.

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What we learn by looking at the history of recessions in the United

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States is that they are a natural yet unpleasant and sometimes

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painful part of the business cycle.

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According to the balance.com.

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There were 12 recessions in the 20th century.

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The great depression was technically two of the nation's

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worst recessions back to back.

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Let's take a look at each one, its causes and how long it lasted.

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Again, this data is all gathered almost verbatim from the balanced.com.

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I will include a link to the article in the show notes.

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Should you want to look at it more fully after listening to this podcast.

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The panic of 1907 lasted from May, 1907 to June, 1908.

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It was caused by speculators losses that spread to trust companies.

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These firms acted like banks, but had lower reserves.

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Congress created the federal reserve system to , prevent future collapses.

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After this panic.

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1929 to 1938, the great depression, the biggest economic crisis in us history

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was two closely related recessions.

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That first downturn was from August, 1929.

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To March, 1933 with a record 12.9% contraction in 1932.

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The second downturn lasted from May, 1937 to June, 1938.

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Unemployment reached 24.9% in 1933 and remained in the double

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digits until world war II began.

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Several factors combined create the great depression.

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The fed raised interest rates in the spring of 1928 and

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continued despite the recession.

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The 1929 stock market crash destroyed businesses and life savings.

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A 10-year drought in the Midwest created the dust bowl that devastated farmers.

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The new deal ended.

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The first recession boosting growth by 10.8%.

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The second recession ended when the drought did and the government

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increased spending for world war two.

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In 1945, we had an recession that lasted eight months from February to October.

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It was a natural result of the demobilization from world war two.

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We had an 11 month recession, which began in November of 1948

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and lasted until October of 1949.

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When unemployment peaked at 7.9%.

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It was caused by the feds raising interest rates too quickly.

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Only four years later, the recession of 1953 lasted 10 months

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from July, 1953 to May, 1954.

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It resulted from tightened monetary policy, following the Korean war.

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Although with this recession, unemployment didn't reach its peak

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of 6.1% until September of 19 54, 4 months after the recession ended.

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Again, Only four years later in 1957, there was another recession which took

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place from August, 1957 to April, 1958.

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GDP fell 4.1% in Q4, 1957, then contracted to a low of 10% in Q1 of 1958.

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Unemployment didn't reach its peak of 7.5% until July, 1958.

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The Fed's contradictory monetary policy caused this economic slowdown.

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Three years later in 1960, there was another recession

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that lasted for 10 months from April, 1960 until February, 1961.

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Unemployment reach to Pico 7.1% in may of 19 61.

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President John F.

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Kennedy is credited with ending the 1960 recession with stimulus spending.

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His opponent, Richard Nixon, blame the recession for costing him the election.

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Uh, in 1970, there was a relatively mild recession lasting 11 months from

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December, 1969 to November, 1970.

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Unemployment peaked at 6.1% in December, 1970.

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The next recession lasted 16 months from November, 1973 to March, 1975.

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The OPEC oil embargo is blamed for quadrupling oil prices.

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Sound familiar.

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But actions taken by president Richard Nixon also contributed to the recession.

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First Nixon instituted wage price controls.

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They kept prices too high, reducing demand.

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Wage controls made salaries to high enforced businesses to lay off workers.

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Second.

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Nixon took the United States off the gold standard in response to a run on the gold.

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How that Fort Knox, which led to inflation the price of gold skyrocketed

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while the dollars value plummeted.

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The result was stagflation and five quarters of negative GDP growth.

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Unemployment reached a peak of 9% in may, 19 75, 2 months after the recession ended.

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The next recession from 1980 to 82.

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Saw the U S economy suffering from back to back recessions in this period.

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There was one, during the first six months of 1980, the second lasted 16

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months from July, 1981 to November, 1982.

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The fed caused this recession by raising interest rates to combat inflation.

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Again, some familiar.

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The increased interest rates, reduced business spending the Iranian oil embargo,

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aggravated economic conditions by reducing us oil supplies, which drove up prices.

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I once heard a saying that history doesn't repeat, but it certainly does rhyme.

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Seems a little fitting here.

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Don't you think?

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During this time, GDP was negative for six of the 12 quarters.

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The worst was Q2 1980 with 8% unemployment.

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Which rose to 10.8% in November and in December, 1982, it

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was above 10% for 10 months.

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1990 to 1991.

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This recession ran for nine months from July, 1990 to March, 1991.

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It was caused by the 1989 savings and loan crisis, higher interest rates

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and interacts invasion of Kuwait.

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Now onto the 21st century, once most of you will be familiar with.

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And its first decade, the 21st century experience three recessions.

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Each was worse than the one before it, but for different reasons.

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The 2001 recession lasted eight months from March to November.

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It was caused by a boom and subsequent bust in.com businesses.

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The Y2K scare had partially created the boom in 2000 companies, but billions of

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dollars worth of new software, because they were afraid the old systems

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weren't designed to transition from the 19 hundreds to, to the two thousands.

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many.com businesses were significantly overvalued and then failed.

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The nine 11 attack, worse into this recession, the economy contracted.

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Acted in two quarters clue one by 1.3% in Q3 by 1.6%.

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Unemployment continued rising until it's peak at 6.3% in June 2003.

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Now onto the great recession, which I'm assuming most of you remember vividly.

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The great recession lasted from December, 2007 to June, 2009.

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The longest contraction since the great depression.

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The subprime mortgage crisis triggered a global bank credit crisis in 2007.

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By 2008, the damage has spread to the general economy through the

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widespread use of derivatives.

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For definition, a derivative is an arrangement or instrument such as a

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future option or warrant who's valued.

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Drives from an is dependent on the value of an underlying asset.

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GDP in 2008, shrank in three quarters, including an 8.5% drop in Q4.

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The unemployment rate rose to 10% in October, 2009, lagging behind the

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recession that caused it, which if you haven't noticed is a theme here.

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Mostly the unemployment lags behind the recessions.

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The great recession ended in Q3 2009 when GDP turned positive.

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Thanks to the American recovery and reinvestment act.

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Now to our most recent one, the 2020 recession was the worst

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since the great depression.

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The us economy contracted 31.2% in the second quarter of 2020 after falling.

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5.1% in the previous quarter.

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In April, 2020, the U S economy lost in astonishing 20.5 million jobs.

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Sending the unemployment rates, skyrocketing to 14.7%.

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It remained in double digits until August, 2020.

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Uncertainty over the pan dynamics impact also caused the 2020 stock market crash.

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The federal reserve lowered the Fed's funds rate to 0% promising

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to keep it there until 2023.

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Congress issued billions of dollars in aid.

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Although the economy grew 33.8% and the third quarter, it was not enough to

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make up for earlier losses in the year.

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Which brings us to today.

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According to Farnoosh Torabi have so money.

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Technically the country is in a recession when gross domestic product,

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the value of all goods and services produced during a specific period

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falls during two quarters back to back.

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And the first three months of 2022, the U S GDP dropped by 1.4%.

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Additionally, according to Turabi, there's also concern that the central

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bank and an aggressive effort to team inflation by slowing down the

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economy could just be forcing the economy into a painful recession.

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As I said in the beginning of this podcast, Looking at the history of

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recessions in the United States, we can see that they are natural

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again, not unpleasant and yes, usually very painful, but they are

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part of a normal business cycle.

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So, what can we do to prepare for the potential 20 22 20 23 recession.

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Or any of the ones we may face father down the road in our careers.

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Well, Tune into episodes, 1 0 6 and 1 0 8, 2 weeks and four weeks from

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now where I offer financial and networking tips to help prepare for

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downturns in the next business cycle.

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Okay.

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After all this recession.

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We definitely need a cocktail.

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This week's cocktail is called the depression glass.

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No, I know depression classes, not because of the depression.

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I get it, but whatever.

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I was looking for a thread here and I found one.

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It has a ton of shit in it that I love, including elderflower in ginger.

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So yay.

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This is what you're going to need.

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One ounce of gin, one ounce of light rum.

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One ounce of St.

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Germain or elderflower cordial, one ounce of ginger liquor, one ounce of triple sec,

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one and a half ounces of fresh lemon juice and one and a half ounces of tonic water.

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You're going to mix all ingredients and it highball glass filled

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with ice stir and garnish with a lemon witch, and then enjoy.

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All right friends, that's it for this week.

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Don't forget to tune into my next two solo episodes in two weeks and four weeks

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for your financial and networking tips.

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To help prepare for the upcoming downturns in the economy.

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Thanks so much for being here.

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This was a lot, you know, it was a lot of information and maybe a little depressing.

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No pun intended, but whatever the future has in store for us, we're

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going to get through it together.

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Until next week.

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