Some reader feedback tells me that I should focus today on what we can do to make money in light of present circumstances rather than trying to explain the problems with current macroeconomic policy from the 30,000-foot view. We will begin with some good news.

Some reader feedback tells me that I should focus today on what we can do to make money in light of present circumstances rather than trying to explain the problems with current macroeconomic policy from the 30,000-foot view. We will begin with some good news.

First, the chances of actually having another recessionary period are much less than 50 percent. All of the media emphasis now lies upon the slowing of growth in our gross domestic product and how the pace of recovery is not fast enough to solve the unemployment problem quickly enough. But slow growth is still growth, and there is no reason to suspect that economic activity will actually contract (become negative) from this level.

Although the national output growth was revised downward to 1.6 percent for the second quarter, this was a little better than recently expected, and history shows that there is a slowing during any recovery after the initial period of the highest rate of growth. Think of it this way. From a standing start, when you step on the gas, you have the fastest rate of change in speed in the first few seconds of your acceleration. Then from 35 to 40 or higher, your speed changes more slowly. Same thing occurs in an economic recovery.

Personal income, savings and spending are all growing. Based on the past six months, income and spending are growing at annualized rates of 3.1 and 2.8 percentage respectively. The difference neatly holds the higher savings amount occurring as millions of us reduce our outstanding debt. Consumer debt has dropped by $156 billion in the past two years, and our level of income required to service personal debt has dropped below the 30-year average.

As many of us get completely out of debt, I predict consumer spending will again rise steadily. Even now, total consumer spending is already back to a higher figure than at any prior time in our history. In my opinion, the halcyon days for credit companies are over for awhile and we will all be better for it in the long run.

So what should you do about your investments? First the recovery road will probably be long, steady and uphill, and the tax code still favors businesses with debt. Therefore we will allocate a higher percentage to bonds than during more normal times, perhaps even 40 to 50 percent. Of that I would place U.S. government debt low on the totem pole, down there with Greece and other governments that can’t control their spendthrift ways. Last week when people offered to buy over $100 billion of two-year notes at less than 50 percent, I was just shaking my head in disbelief.

That leaves U.S. corporate bonds, of which the top layers of junk, those rated BB or B, and the lowest layers of investment grade, A and BBB, would be preferred. Next choose a mutual fund that contains the big, stable multi-national companies that have lots of revenue outside the United States or buy your own blue chips meeting the same criteria. Third, I would seek growth in the emerging markets of Asia and Latin America. It is a cruel irony that formerly low-ranking countries are now in better shape for the future than we are. But the times, they are a’changing, in more ways than one.