Where is US economy headed?
Assessing the role of global factors
- Duration 4:38
- Date Jun 6, 2012
Assessing the role of global factors
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Today have the economy in the United States is thought to be growing about two and a half percent a year do you agree with that you think there's any chance of recession in the near term.
I think is very low unless.
-- -- events in Europe the -- some -- that that spill over her big time.
They probably recognize -- that's one of America's most prominent investors Warren Buffett speaking at the economic club.
At Washington late yesterday evening he offers that very -- disclaimer about our economy were okay.
Unless Europe gets worse and -- -- -- was happening in Europe not only has -- potential spillover to the United States but may actually ignite.
A global depression the is there anything and we should be optimistic about in our own economy.
Well the United States economy is at least more stable at this point based on the evidence then then other -- of the world not just in Europe but also.
China is having -- -- slowdowns another one of the concerns out there so obviously retail sales have held up -- relatively well.
Yes the jobs report most recently was disappointing but we had basically two million more people working out and we did.
About a year ago so obviously.
That they underpinnings are okay right now the housing market looks like it's showing signs and at least has bottomed even if it's not going to search so those are the things.
Or hang our hats and does that -- -- it's like the best -- in detention.
To some degree I mean look 2% growth in fact the latest quarter was revised down below 2% in terms of the gross domestic product that's not impressive it doesn't feel good it doesn't feel like the economy's.
In anything like a boom.
But we are on usually -- -- stable.
Because unlike other parts of the world United States mostly makes things and does things for its own people and so we're not really export base were not as reliant.
On everything going on the rest of the world as other countries but yeah it's not a it's not exactly as if -- a great economy.
Your chest spending and that you know her -- at this time let's talk a little bit about your there was an article in the Financial Times an editorial.
Where the writer brings that a sense of fear -- and -- in the market and he made the argument is in his -- wolf that.
That Europe needs a lender of last resort for its banks and -- -- governments and he's hypothesize -- about -- that could potentially be.
He is -- come out and say I sure but I wonder if that's even an option.
That in some way the American taxpayer.
Could backstop Europe.
To prevents that crisis from coming closer that's is that even a possibility.
Hi I don't think it's a possibility -- an -- way but I do think that what Europe is looking at right now more immediately is some kind of burden sharing so basically all of Europe.
Kind of -- its resources and essentially saying you know the dead of the least of our neighbors is actually now our -- if you're richer country.
And so we put between the European Central Bank which has the ability like the Federal Reserve to essentially print money and purchase -- if it's so chooses.
Along with the International Monetary Fund which by the way is kind of US dominate I.
So yes all those things together.
Could in fact be part of a package that's that they kind of counteract this over indebted situation let -- Disaster that was happening with the data -- -- big pockets out confusing after seeing the session is being a lower for a rob and with the worst day in the market of the year on Friday -- so it.
What do you -- The market kind of slid it got to an overstretched level really had been going straight down for -- while usually do get a bounce and then you also had -- some reports today.
That the Federal Reserve is now perhaps moving closer to another round of aid for the economy -- at that.
I mean well.
Most likely it would mean that it would extend what it's been doing which has been buying longer term treasury bonds and other securities to try to keep interest rates unusually low.
And essentially more -- -- just inject more money.
Into the banking -- their front.
Become the value of the dollar inflation in the future is that just being out weighed in in those -- think that maybe they're entertaining -- By the fact that the other countries out there are in worse shape than.
And that's going to be okay for -- somehow -- -- weren't -- -- connected -- -- the dollar's been rallying so strongly right now that nobody -- too concerned about taking a little bit of froth off the value of the dollar at this point in terms of inflation.
You know inflation expectations in the market have really slumped recently -- -- have not gotten as low as they were when the Federal Reserve the previous two times came out and threw money at the problem okay so that's one of those issues I mean if we're if we're basically.
Gonna kind of reignite.
Those fears again it will be a concern but look oil prices are down 20% off their highs obviously not victory -- the ammunition is there the Federal Reserve decides to use.
This winter when he threw that boomerang when is gonna come back -- you.
You know I -- I don't now Mike nice to have established.