The average economic recovery has lasted about six years in the past half-century, spurring discussion about how much longer the current rebound will last.
The Great Recession, which was the worst economic contraction since the Great Depression, ended in 2009, making this recovery about as long as the last one during the presidency of George W. Bush. In response to the decline, the Federal Reserve cut interest rates to record lows of near zero percent, where they’ve stayed since December 2008.
“If another recession materializes, interest rates may have to fall further in order to support the economy,” writes Peter Spence, economics reporter
for the U.K.’s Telegraph newspaper. “There are many potential catalysts for a downturn.”
He said risks include a breakdown in the financial system echoing the 2008 collapse of Lehman Brothers, overinvestment as in the 1990s or consumption that can’t be sustained.
“Beijing is attempting to manage slower growth,” Spence writes. “Some economists fear that policymakers will not be able to handle this process smoothly, and that China could be in for a ‘hard landing’ as a result.”
Meanwhile, China’s economic growth has slowed to a crawl in the critical areas of construction and manufacturing that require raw materials from other countries such as Brazil, Russia, Australia, Saudi Arabia and Indonesia.
“Things will get much, much worse,” said Albert Edwards, head strategist at Societe Generale, in a report obtained by Newsmax Finance
. “But the key message is that when it comes to things that matter to the rest of the world, China has already hard landed!”
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