The chattering that can now be heard at virtually every turn is whether the forthcoming slowdown will turn into a recession. Hearing this brings to mind two people on a beach discussing whether or not the tide will come in that day. It is in our nature to seek to put ourselves at the centre of events, however unrealistic that might be.

We see this most strikingly in the Climate Change debate, where temperature changes over a statistically insignificant period of time – given the earth's longevity – are endowed with significance to underscore our own importance in the scale of things.

Using events as a prism to reflect our own importance is precisely what is happening in the world economy at present.

The world is going into a recession – not a slowdown – because history teaches us that the fundamentals that exist at present in the credit and asset markets are precisely the fundamentals that have led to a recession about once every 25 five years and a major recession about once every 50 years.

Recession is indeed a man-made thing, but our own collective self importance will not allow us to acknowledge its arrival until it is too late. There has never ever been a recession that those involved saw coming.

In 1927 the economist John Maynard Keynes went as far as to suggest that recessions were a thing of the past. A couple of years later the Great Depression hit.

History tells us that when the bankers and the insurance industries are acting as gamblers, rather than insurers or bankers, when governments spend money without reference to value and when assets are valued not as assets but as collateral for further borrowing, then recession will arrive as sure as the tide will come in.

No amount of micro or macroeconomic management by anyone can avoid it. It is now too late. Action can only be taken to speed recovery.

Quite how hard the recession hits will depend on how comprehensively each country has forgotten the lessons of the past. The US, in thrall to consumer spending and over-valued assets, has been moving into recession for the past 16 months.

In the UK, where we have already had runs on a bank and on the currency and where billions of pounds in property funds are now frozen for fear that investors will panic, things look particularly grim. The type of fiscal stimulus being unveiled in the United States is no longer available to the UK Government which, under Chancellor Gordon Brown, has squandered the national treasure with criminal negligence.

And unlike in the US we are moving into a sharp slowdown with the biggest property bubble in our history still unpricked and a historically high number of migrants who depend on a growing economy for jobs. When the housing bubble deflates and the Mcjobs dry up (see Bulletin), then the slowdown will become recession.

The majority of readers will disagree, but my own view is that the debate should not be how we avoid a slowdown turning into a recession, but how we avoid a recession turning into a deep recession.

History is clear. The longer we ignore what is staring us in the face the deeper and more severe will be its  impact. 2008, 2009 and 2010 are going to be difficult years.

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