U.S. Could Face Second Recession Next Year

[Purveyor]

NEW YORK (Reuters) - Although the U.S. economy is expected to return to growth later this year, there is a danger of a second recession if monetary easing and a weak dollar leads to increased inflation expectations, a report said on Wednesday.

Massive stimulus spending and moves by the Federal Reserve to fuel economic activity is expected to jump-start the anemic U.S. economy in the last quarter of this year after it contracted 6.3 percent in fourth quarter of 2008.

But the Fed's moves to boost the economy by slashing interest rates and buying up billions in government debt could have undesired consequences, The Conference Board, a private research group, said in the report.

"If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010," said Bart van Ark, vice president and chief economist of The Conference Board.

"It may fuel expectations for a return to inflation, adding to the uncertainty concerning the pattern and path of economic recovery," he said.

The U.S. economy has the potential for a "double-dip" recession, Van Ark noted, similar to 1980 and 1982, as commodity prices rise on the back of a falling dollar and monetary easing.

MORE...

REUTERS: http://www.reuters.com/article/newsOne/idUSTRE5308HW20090402

[tinkerbell41]

1. Second???

I didn't think we pulled out of the first starting in 2001. My industry hasn't had "good" times since then. Everytime I heard the talking heads say we were in a boom time I was like who???
I live near Chicago, most people I know have been struggling since then. The only areas showing ANY growth were the upper middle to upper class. Good to know this next one will probably finish me off.

[CoffeeCat]

4. Right now...

...the media is adamantly insisting that "Happy Days Are Here Again."

I perused the financial media today--and I was shocked. As far as they are
concerned, we're experiencing an economic boom right now, and things are
going swell--and they'll only get prettier by the hour.

I don't know what in the hell these people are doing. I really don't know. It
could be as simple as trying to improve consumer confidence--in order to spark
spending. Americans have been saving a lot more. Many got their tax refunds.
Who knows...maybe they're trying to entice people into spending some of their
stash---like those people in "Jaws" who tried to convince Amity residents that
the waters were fine after they caught that tiger shark.

Clearly, this new theme, "We might have another recession" is part of the
campaign to convince us that nothing is wrong now--and things are well.

Meanwhile, the U.S. lost more than 700,000 jobs in March.

I've never seen such a jarring disparity between the propaganda and reality.

[tinkerbell41]

5. Crazy I say!!

You could be right, but considering all the TALK of the last 8 yrs I would think by now (hope)
people would believe their reality. I know 3 people personally who haven't had a decent job prospect in a year. I met many more doing this temporary get out the vote thing that have been doing temp gigs for a loooong time. I don't see it. I waitressed (2nd job) for 4 yrs at a high end
steakhouse, during the "last one" and everyday I wondered how these people were doing so great when everyone I knew was contemplating how to pay next week's groceries.
Unbelievable!!! Jaws is right, make a last grab for whatever spending people have left, before it all blows.

[ixion]

2. that assumes the (very flimsy) precept that the DEPRESSION will end this year

which, in my bet, it most certainly will not.

[CoffeeCat]

3. It's as if we're trying to...

...solve our problems by creating bubbles--that are short lived and will eventually pop.

Economic growth--completely dependent on consumers spending like fools--is not a healthy economic model.

We must stop shipping our jobs overseas. We have to make things again.

It's about producing something--innovating and jobs that pay well.

Until this nonsense is halted--I'm in cautionary mode--buying only essentials and preparing
for long-term recession and/or a Depression.

As long as we have misguided fools steering the ship toward big icebergs, we're all vulnerable.

[tinkerbell41]

8. Well Said!!!

[hunter]

6. Titanic might sink twice!

Oh No!

[stillcool]

7. I might win the lottery!

[dkofos]

9. The way we are going, we will never get out of this one.

[moondust]

10. It COULD take several generations.

The deregulation and cheap-labor mindset isn't likely to disappear anytime soon.