Bad Economy Predicted to Turn "Fairly Bad"
In my perpetual quest to ensure the spread of sunshine and happiness and fields that grow with lollipops and rivers that flow with chocolate, because I like to think of myself as the quintessential bearer of all news that is happy, I bring to you yet another sign that happy days are here again and that we can all rejoice that our great country has rebounded once again.
You might be saying to yourself, “Golly, Mr. H. What could this über fantastic news possibly be?” I’m so glad you asked.
We received the ever-so-wonderful news from financial services giant Goldman Sachs on Wednesday that the “U.S. economy is likely to be ‘fairly bad’ or ‘very bad’ over the next six to nine months.”
I’m not even going to argue about whether the economy has been in a recovery mode since whenever the hell a bunch of likely overpaid smart-asses tried to sell us a bill of goods that said the recession ended over a year ago. For my own sheer amusement, I’ll just give them the benefit of the doubt for now.
Jan Hatzius, Goldman’s big dog economist here in the U.S., indicated that he sees the economy playing out two ways in the very near future. In one instance, unemployment ticks back up to 10 percent, and the economy schleps along and doesn’t grow at a rate of more than 2 percent by next year. In the other instance, we’re right back into a full blown recession that apparently ended last year. It should be noted that in an e-mail to Goldman clients, Hatzius is predicting that the first of these scenarios, the “fairly bad” one, is the most likely to occur.
We can only hope, I reckon.
Despite this prediction, Hatzius also implied that the country still has a roughly one in four shot at hitting the “very bad” scenario of another recession, which is “up from 15 percent to 20 percent at the start of the year.”
Having said that, some bigwigs at the Federal Reserve have an odd solution to fix the mess that is our economy. They actually want to lift inflation above their “informal target.” This idea is being thrown around because the country is apparently on the verge of deflation, an overall drop in prices normally resulting from a decrease in the money supply or in personal spending.
Continued on the next page
Follow Technorati