Former Federal Reserve chairman Alan Greenspan said yesterday that the U.S. economy is in recession and that it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.
Also today, the International Monetary Fund concluded in a new forecast that underscored the damage inflicted from the housing and credit debacles. Economic growth in the United States is expected to slow to a crawl of just 0.5 percent this year, which would mark the worst pace in 17 years, when the country had suffered through a recession. The United States won't fare much better next year; the IMF projected the U.S. economy will grow by a feeble 0.6 percent in 2009, when measured by an annual average.
I still stand strong in my opinion that stagflation is the problem going forward, not recession. If our gdp is 70% consumer spending, there is no value added to the society. The big muckimucks of wallstreet should consider how to invest in areas that increases value and not just consumer spending!! That is what will take out of stagflation.
Bill
San Diego Tourism
If I predict recession every year I will get it right eventually.My understanding of economics is that something either goes up or it goes down. There are 50-50 odds to guess right. Some may guess 60% right but will eventually revert back to the mean. Its too bad this is a time when the system has been raped for every nickel and dime for the next few years.
Kelly
San Diego County Real Estate Agent
Maybe a recession would not be a bad thing over the long run; yes, house prices might fall even more than during the great depression but maybe there are just different drivers and each depression will be driven by completely different circumstances.
Ian
San Diego California Real Estate Brokers
Oh please, just get it over and done with! A recession is required to weed out the crap in the market.
The UK & US both need a hard landing. Bring it on!!
Leonna
Tj Mexico Dentistry
Consumer demand will drop. Unemployment will rise. The US will go into a recession at best, a depression at worst. Expect first stagflation (high inflation and high unemployment), both because of the increased price of imports and deliberate pump priming by the Fed, then deflation, as asset prices collapse so hard they take everything else with them. The other likely scenario is stagflation followed by hyperinflation. Formal inflation numbers put out will become not just a joke amongst market-watchers, but amongst the actual population. Same thing with unemployment numbers.
Adam
SF California Attorneys