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America's five-year downturn

By Archean
Aug 10, 2011
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  1. What the central bank of the world's biggest economy, the US, said last night was that there would be no proper recovery in that economy for at least another two years. That was the meaning of the announcement of the US Federal Reserve that it anticipates holding its official interest rate, the so-called federal funds rate, at exceptionally low levels "at least" through mid-2013.

    I am pretty sure that 2007-08's financial sector crisis + mindless absorption of financial institutions bad debts on US Govt balance sheets are one of the major causes of this, leaving the Govt. with not much room to maneuver around to try to boost the economy for any long term recovery even with near zero rate of interest.
     


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