Expert: Recession? WHAT Recession?

All the gloom and doom in the media over the economy has lots of us scurrying to change what we've been doing on the investment front.

There are hitches, though, according to financial author and radio host Dave Ramsey: We're not IN a recession, and even if we were, that's often the best time to invest!

The basic bottom line, says Ramsey: Stay the course on your investment strategies, as long as they've proven successful!

On The Early Show Tuesday, as part of the "Recession-Proofing Your Life" series, Ramsey answered questions e-mailed in by viewers:

"WHAT ARE YOUR THOUGHTS ON A WORLDWIDE ECONOMIC COLLAPSE? IS IT JUST TALK?" asks John, from New York.

"I'm 47-years-old," Ramsey replied, "and every year in my memory, there's been some sort of talk like this ... but I've never seen it happen.

OK -- but how can we be so certain that the world's not going to fall apart this time around?

"The U.S has the most robust economy in the history of man, and it's the most sophisticated it's ever been; there are lots of checks and balances and safety nets," Ramsey explained.

He pointed out that, "The market dropped the same amount (relatively) when President Nixon resigned as it did during the Great Depression, but there were so many more safety nets in place in the 1970s that the drop didn't have the same effect. The markets dropped 511 points in minutes when the markets opened after 9/11, but there still was no crash or meltdown.

"By definition we are not in a recession," Ramsey said forcefully. "We have not even had one month of recession; we've had SLOW GROWTH. The economy was growing at (an annual rate of) 3.5 percent; now, it's at 1.5 percent, which is a big impact, but it's still growth. In order to be in a recession we must RECEDE: The official definition of an economic recession is an economy that has negative growth, that shrinks, for six consecutive months or more."

  • CBSNews

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