Friday, January 14, 2011

Second recession deemed possible - New Mexico Business Weekly:

http://www.rd-congo.com/
Those odds may seem low, but they’re actually high sinc double-dip recessions are rare and the U.S. economuy grows 95 percent of the saysthe chamber’s Marty Regalia. He predicts the currenyt economic downturn will endaroundc September. However, the unemployment rate will remain high through the first half of next year andinvestmenty won’t snap back as quickly as it usually does aftetr a recession, Regalia says. Inflation, however, looms as a potentiapl problem because of thefederal government’s huge budgetr deficits and the massive amounty of dollars pumped into the economy by the Federapl Reserve, he says.
“The economy has got to be runninv on its own by the middlee ofnext year,” Regalia says. Almostg every major inflationary periodin U.S. historyu was preceded by heavydebt levels, he notes. The chancea of a double-dip recession will be lower if Ben Bernanke is reappointed chairman of theFederal Reserve, Regalia says. If President Barack Obamqa appoints his economic adviser Larry Summers to chairthe Fed, that woulc signal the monetary spigot would remain open for a longer he predicts. A coalescing of the Fed and the Obamq administrationis “not something the markets want to Regalia says.
Obama has declined to say whetherd he willreappoint Bernanke, whose term ends in February.

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