I know the talk is out there, and I know this is a very real risk during the recovery of a recession, but I don't think we are heading in that direction. Here is why:
1. Most secondary recessions follow a weak recession. Without the joint efforts of most of our world powers, the ability of businesses to conduct daily activities would have ceased to exist. That being said, we are going through a strong recession rather than spiralling into a depression. Definitely nothing weak here!
2. Secondary recessions are spurred on by an overzealous recovery. If a recovery happens too quickly, that is when you see inflation. As this recession drags on, I feel it is creating a stable, controlled recovery. Don't get me wrong though, interest rates will increase. That is a given at a Fed rate of 0%.
3. Now I am going to go out on a big limb here and say that OPEC is going to maintains some discipline as the world recovers. They do understand their role in the health of the world economy, and those that didn't before got to see it first hand. There wasn't a lot that was going to stand in the way of speculators running oil to $150/barrel, but as the economy turned for the worst, OPEC did contribute their form of stimulus by not slashing production. $60-80/barrel oil is probably the right mix of providing the Middle East with the revenue they need, and allowing the world recover responsibly. $150 oil too soon into the recovery would be VERY BAD.
Don't let the Bears scare you. Buy the dips if you have money to invest, and hold on to the investments you already have.
I agree that the major influencer in creating an aftershock recession would be to believe that the economy is hunky-dory and believe that recovery is already here. The biggest hope that we can have for consumers as a whole is that they actually exercise a little responsibility with their expenditures and do a little saving.
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