There’s no doubt about it – the Recession is coming. Every day there are more and more stories in the financial press of cutbacks, layoffs, and downsizing. The smart investors have already battened down the hatches and are preparing for the worst. Perhaps most telling of all is the increasingly morose and melancholic Ben Bernanke, who has been forced to cut interest rates at an unprecedented pace to keep the economy trundling along (and his ‘buddies’ on Wall St. from lynching him).

Sadly, for poor ol’ Ben, unless he’s planning to start paying people to borrow money any time soon, there’s only so much lower interest rates can actually go. In all likelihood, it’s just a matter of time until the economy slips into the red and starts to contract.

The many faces of Ben Bernanke – This is not the portrait of a man who is enjoying his job!

Predictions of doom and gloom aside, recessions are a natural part of the business cycle, and in many respects this country needs a recession more than it needs to avoid one. Recessions keep our feet on the ground. They remind us that for every stupid financial decision (or ‘misallocation of resources’ in econospeak™) there are consequences. In a sense, a recession is the economic equivalent of divine retribution. Most importantly, recessions teach us the lessons we seem to forget when times are good.

How to be ingenious, independent, and self-sufficient. You’ll be forced out of your comfort zone. As scary as that might sound, you’ll learn about strengths you never even knew you had. Like my parents always told me, adversity builds character.

How to be content with what you have. As much as you think you might love your iPod, designer clothing or gourmet cappuccino maker, you don’t. Buying material possessions will bring you short-term, fleeting happiness at best, and you’ll never be satisfied for long. Why do you think we’re all in so much debt?

How to have fun for free. Take a walk with your family, watch a sunset with your sweetheart, or just sit under a tree and listen to the birds.  The best things in life really are free!

How to live within your means. Frugality and sound financial planning are what made America great. Did you know that within less than 50 years we went from the world’s biggest creditor to its biggest debtor?

No-one likes Recessions (except maybe Pawn shop owners and debt collectors), but they are a necessary evil. By keeping interest rates artificially low for the last few years to forestall the inevitable correction (and thus allowing people to continue making stupid financial decisions!), the Fed has tampered with the natural order of things and we may be in for a real doozy.

Just remember that the bad times will pass, and when they do you’ll be able to appreciate the good times all the more. The sweet is only as sweet as the sour.

Related posts:

1. How to survive the coming Recession
2. Deposit Insurance: Recession-proof your savings
3. Frugal Living Tips for a Recession
4. Bank of America: The Nice Guys?
5. Honor and Ethics: Does America Need a “Lending Code?”