[url]http://www.csmonitor.com/USA/2010/1206/Bernanke-US-close-to-border-of-recession-Federal-Reserve-may-intervene[/url]
[quote]
In a televised interview, he said the key risk facing the economy is not inflation but [URL="http://www.csmonitor.com/Business/Paper-Economy/2010/1203/Unemployment-jumps-to-9.8-percent-highest-since-April"]protracted high unemployment[/URL] – and the possibility that the US could even stumble back into recession.
Mr. Bernanke used the appearance as a platform to rebut critics of the Fed's plan to [URL="http://www.csmonitor.com/Business/2010/1103/Federal-Reserve-to-buy-600-billion-in-bonds-as-hedge-against-deflation"]buy about $600 billion in bonds[/URL] in an effort to pump money and confidence into the economy. Some economists say the effort isn't needed, given signs of stabilization and improving growth in the US economy. And others say the move could fuel inflation and make it even harder for the Fed to manage an "[URL="http://www.csmonitor.com/USA/2010/0210/Bernanke-outlines-exit-plan-to-extract-Fed-from-safety-net-role"]exit strategy[/URL]" from its extraordinary measures to prop up the economy.
Investors have been pushing up the price of gold since the Fed's new round of bond purchases was announced. One reason, commodity analysts say, is investors' desire to own gold as hedge against heightened risks of inflation.
But in an interview that aired on CBS's "60 Minutes" Sunday night, the Fed chairman defended his policies without reservation.
"We're not very far from the level where the economy is not self-sustaining" in its recovery, Bernanke warned. He described the economy as "close to the border," because annual economic growth of about 2.5 percent is needed just to keep an already-high unemployment rate from getting even worse. (About 125,000 new people enter the labor force each month, on average.)
[B]More Fed action 'certainly possible'[/B]
As if to underscore Bernanke's point, the unemployment rate rose in November to 9.8 percent, even though the economy added 39,000 jobs for the month.
Bernanke said "it's certainly possible" that the Fed would expand its planned bond purchases beyond $600 billion during the next half year or so, if economic conditions warrant.
To many stock investors, that's a reassuring message that the Fed won't let the economy sink at a time when a public-debt crisis in Europe is stirring fears of stagnant growth in euro zone economies. However, Bernanke offered a fairly gloomy outlook for the economy, so in that sense he's not cheerleading a bull market.
Major Wall Street stock indexes fell slightly Monday morning, while Treasury bond prices rose.
"At the rate we're going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say 5 or 6 percent," Bernanke said.
The Fed operates with a mandate from Congress to seek both general stability in consumer price and full employment for the economy. Bernanke said the Fed's current policies are designed to confront abnormally high joblessness, and well as to head off the risk of deflation in consumer prices or a dip back into recession.
He said such a return to recession is unlikely, but possible if protracted unemployment causes consumer confidence to erode.
[B]A 'dire threat'?[/B]
Critics of the Fed policy say that, short of a major new emergency, the Fed should avoid a pull-all-stops approach to policy.
Expanding its balance sheet to nearly $3 trillion worth of bonds is something the Fed "should only consider if there were a dire threat to the financial system," economist David Malpass of Encima Global said in a report Monday.
"Having the Fed buy bonds in the absence of a crisis is unprecedented and raises many risks – it manipulates markets, creates a bigger overhang when the Fed tries to unload the bonds, [and] risks capital losses at the Fed if interest rates rise," Mr. Malpass warned.
Skeptics of the Fed's latest monetary gambit also worry that it will be ineffectual in creating jobs – especially if it fails to bolster public confidence in recovery. Interest rates on the 10-year Treasury bonds have edged up, not down, since the central bank's new bond-buying effort was announced this fall.
Bernanke avowed "100 percent" confidence in the Fed's ability to withdraw its monetary stimulus at the appropriate time.
He said "fear of inflation ... is way overstated," given that unemployment is so high (which holds down labor-cost pressures). Bernanke said Fed policies appear to be succeeding at preventing deflation, or falling prices that can erode wages and economic confidence.[/quote]
Glad I'm heading to boot now.
There won't be another recession. They just need to fix unemployment rates and things will turn out to be fine again. Read the entire article, seriously.
Gosh, I've completely lost track of this multinational debt business. In England, it's all "double dip recession" and "80% off everything!".
[QUOTE=Xystus234;26532349]
Glad I'm heading to boot now.[/QUOTE]
I don't blame you, it's guaranteed income. Have fun.
Oh well fuck.
I don't even believe the last recession even ended.
Sure they said it's "officially" over, but i've noticed no difference at all.
Hasn't this happened before, at least a dozen times?
US is really good with their economy.
Fuck off china.
I was never aware that we were done with the current recession
Another? It's the same one!
A recession is classified by the GDP. Since our GDP is growing the recession is over.
[QUOTE=R3mix;26532431]There won't be another recession. They just need to fix unemployment rates and things will turn out to be fine again. Read the entire article, seriously.[/QUOTE]
its not that simple
[QUOTE=Xystus234;26532349]Glad I'm heading to boot now.[/QUOTE]
Enjoy going to war after
take lots of pictures
[QUOTE=R3mix;26532431]There won't be another recession. They just need to fix unemployment rates and things will turn out to be fine again. Read the entire article, seriously.[/QUOTE]You say it as if it's as easy as pressing a button
A recession within a recession...
It will not suffice. We need to go deeper...
[QUOTE=Shustriy;26533490]You say it as if it's as easy as pressing a button[/QUOTE]
Or printing more money.
[QUOTE=not_Morph53;26533581]Or printing more money.[/QUOTE]
Oh the good old days of Weimar Germany...
USA's unemployment rate is ridiculously high, unbelievable, that's so fucking bad
Wasn't this predicted way way beforehand
I swear I saw this 'double dip recession' stuff in a business mag like early this year / last year
I was unaware we even left the first one.
Yay!
"Another"
:colbert:
[QUOTE=JustGman;26533993]I was unaware we even left the first one.[/QUOTE]
We haven't, it just sounds inspiring to say that we have and are on the road to recovery. We still have unemployment rates that are not quite (but we are getting there) as high as they were during the Great Depression, the dollar's value is still down from what it was, our national debt is well over $13.8 trillion (and gradually rising), Congress is divided over what to do in order to solve it...
This whole thing is seriously fucked up. And what's worse is that there's no single fix that can be used in order to solve our problems, despite what people claim. It's going to take lots of fixes and many years before we're back where we were. And that's if we get lucky and DO make all the best decisions.
[QUOTE=LunchboxOfDoom;26534384]We haven't, it just sounds inspiring to say that we have and are on the road to recovery. We still have unemployment rates that are not quite (but we are getting there) as high as they were during the Great Depression, the dollar's value is still down from what it was, our national debt is well over $13.8 trillion (and gradually rising), Congress is divided over what to do in order to solve it...
This whole thing is seriously fucked up. And what's worse is that there's no single fix that can be used in order to solve our problems, despite what people claim. It's going to take lots of fixes and many years before we're back where we were. And that's if we get lucky and DO make all the best decisions.[/QUOTE]
Well as previously mentioned a recession is officially over when the GDP experiences growth. It doesn't matter how shit the internal situation is as long as the GDP is rising.
So yes we are out of the recession, but that doesn't mean that conditions internally are any better than a year or two ago.
[QUOTE=LunchboxOfDoom;26534384]We haven't, it just sounds inspiring to say that we have and are on the road to recovery. We still have unemployment rates that are not quite (but we are getting there) as high as they were during the Great Depression, the dollar's value is still down from what it was, our national debt is well over $13.8 trillion (and gradually rising), Congress is divided over what to do in order to solve it...
This whole thing is seriously fucked up. And what's worse is that there's no single fix that can be used in order to solve our problems, despite what people claim. It's going to take lots of fixes and many years before we're back where we were. And that's if we get lucky and DO make all the best decisions.[/QUOTE]
We [b]are[/b] out of the recession. It's been proven already. Problem is that we're on shaky grounds right now because investors are scared and so are consumers.
To all the people saying we never left the recession: a recession is classified as a decline in GDP for more than two quarters. Since the GDP hasn't declined for the past two quarters, we are not in a recession.
There's more to it than that, but according to the most commonly used definition, we're not in a recession.
[url=http://en.wikipedia.org/wiki/Recession#Definition]wikipedia article[/url]
[QUOTE=R3mix;26534486]We [b]are[/b] out of the recession. It's been proven already. Problem is that we're on shaky grounds right now because investors are scared and so are consumers.[/QUOTE]
What's worse is now that we have articles like this saying that we might be going into a recession, it's most likely going to cause people to panic further and cause the recession to actually happen.
[QUOTE=Edthefirst;26534485]Well as previously mentioned a recession is officially over when the GDP experiences growth. It doesn't matter how shit the internal situation is as long as the GDP is rising.[/quote]
A recession encompasses and is measured in scale by far more than just GDP. It is also based on national employment/unemployment rates, investment spending, capacity utilization, national household incomes, business profits, and inflation/bankruptcy levels.
As far as GDP goes, we're still down something like 2.6%, ranked 132 in the world.
[url]http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_rate[/url]
[IMG]http://i55.tinypic.com/30j0n7p.jpg[/IMG]
Funny kind of growth. The recession here in the United States, let alone the global financial crisis, is far from over.
[QUOTE=R3mix;26534486]We [b]are[/b] out of the recession. It's been proven already. Problem is that we're on shaky grounds right now because investors are scared and so are consumers.[/QUOTE]
Who "proved" that the recession has ended and when did this happen? Moreover, [b]how[/b], exactly, did they prove it was over in light of the problems above I brought to attention?
[editline]7th December 2010[/editline]
[QUOTE=Hafring;26534607]To all the people saying we never left the recession: a recession is classified as a decline in GDP for more than two quarters. Since the GDP hasn't declined for the past two quarters, we are not in a recession.
There's more to it than that, but according to the most commonly used definition, we're not in a recession.
[url=http://en.wikipedia.org/wiki/Recession#Definition]wikipedia article[/url][/QUOTE]
[quote]In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: "a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales." Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's onset and end.[/quote]
And North Dakota won't be affected at all, again. :smug:
The best way to fix a recession is telling everyone that the recession is over so they are more likely to go out and buy shit.
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