Greenspan: Recovery to take longer
February 25, 2008
By Souhail Karam
JEDDAH (Reuters) - Economic growth has stalled and recovery may take longer than usual, former Federal Reserve chairman Alan Greenspan said on Monday.
“As of right now, U.S. economic growth is at zero,” Greenspan said at an investment conference in Jeddah, Saudi Arabia’s second-largest city. “We are at stall speed.”
“Recovery might take longer to emerge than it usually does,” he added.
The longer growth stays at zero, the more likely the world’s largest economy would start to contract, he said, adding that globalization of trade could ease some shocks.
“Growing globalization of trade and the economy would facilitate the absorption of shocks in the U.S.,” he said.
In updated economic forecasts released last week, the U.S. central bank lowered its outlook for 2008 growth by a half percentage point to between 1.3 percent and 2 percent, citing the prolonged housing slump and bottlenecks in credit markets.
The Federal Reserve said at the time it was worried the economy could face further setbacks, even after a series of interest rate cuts.
Greenspan also said a boom in oil prices, which hit a record of $101.32 on Wednesday, will “go on forever”.
Soaring crude prices have kept U.S. inflation high, even as growth slows.
© Reuters 2008 All rights reserved
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Ankarlo,
I am not that concerned about our economy today. We are finally getting the economical ’spanking’ that we deserve!
Lending institutions are getting spanked for giving us ‘free’ money that we don.t have; businesses for offering us product we don’t have to pay for for years(yeah…that works!!); and the consumers for falling for all that crap!!!!!!!!
The consumers, many of us Baby Boomers that are retiring or getting ready to retire, are FINALLY saying “We can’t keep doing this! You keep giving us money and act like it’s no problem.” Well..later is here now, and the money just isn’t there.
I have busted my proverbial butt all my life to get where I am today. We aren’t rich by any means, but we will be ok. I DON’T want the government to take MORE of my money to help those that don’t want to help themselves. If others weren’t smart enough to catch on earlier, don’t make me pay for it. The government doesn’t take care of you. I DO!!!! the government does NOT create money….WE GIVE IT TO THEM!! THEY SPEND MONEY..MY MONEY. Quit asking for the government to give you more because you are taking it out of my pocket.
I’ll take care of my family…you do the same!!
Thank you,
Monte Clinton