Sunday, July 22, 2012

Second recession deemed possible - New Mexico Business Weekly:

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Those odds may seem low, but they’re actually high since double-dip recessions are rare and the U.S. economyu grows 95 percent of the saysthe chamber’s Marty Regalia. He predicts the currentt economic downturn will endaround September. However, the unemploymeng rate will remain high through the firsrt half of next year andinvestment won’t snap back as quickl y as it usually does after a recession, Regalia Inflation, however, looms as a potential problemk because of the federal government’ss huge budget deficits and the massive amount of dollars pumpedr into the economy by the Federal Reserve, he “The economy has got to be running on its own by the middle of next Regalia says.
Almost every major inflationary periodin U.S. historhy was preceded by heavydebt levels, he notes. The chancexs of a double-dip recession will be lower if Ben Bernankre is reappointed chairman of theFederal Reserve, Regalia says. If President Barack Obama appoints his economic adviser Larry Summers to chairthe Fed, that would signall the monetary spigot would remain open for a longert time, he predicts. A coalescing of the Fed and the Obamaw administrationis “not something the markets want to see,” Regaliz says. Obama has declined to say whetherd he will reappoint whose term endsin February.

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