Tuesday, August 3, 2010

Former US Fed chief warns of recession














Alan Greenspan, former chairman of the US
Federal Reserve, warns that ‎the US economy
may be heading for a double-dip recession.




Source: Press TV
http://www.presstv.ir/detail.aspx?id=137238§ionid=3510213


Former chairman of the US Federal Reserve Alan Greenspan has added his weight to warnings about a pause in the economic recovery and a double-dip recession.

"We're in a pause in a recovery, a modest recovery but a pause in the modest recovery feels like a quasi-recession," he told NBC on Monday, amid worries about a slowdown in economic recovery.

When asked about the chances of another US economic recession, Greenspan said, "It is possible if home prices go down. Home prices as best we can judge have really flattened out in the last year."

He also predicted that unemployment will remain at its current high level of 9.5% for some time.

"The financial system is broke and I see we just stay where we are," he said. "There's nothing out there that I can see which will alter the level of unemployment."

Meanwhile, Greenspan's successor Ben Bernanke said America has a long way to go to achieve full economic recovery, warning that Americans may still face economic hardships in the coming months.

Figures released on Friday showed that US growth had slowed from an annual rate of 3.7 percent in the first quarter to 2.4 percent in the second.

Greenspan served as chief of the US Fed from 1987 until his retirement in 2006 when he was replaced by Ben Bernanke.

Greenspan also expressed concern about the limited impact of stimulus measures.

"Our problem is that we have a very distorted economy," he said. Recovery had been limited to "large banks, large businesses and high income individuals."

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