HOW TO KNOW WHETHER THE ECONOMY IS REALLY IN RECOVERY. With about 25 years of finance and mortgage experience as a tutor, I’ve been saying for years now – you’ll know that the American economy is creeping back to life when the Federal Reserve moves the interest rates for inter-bank borrowing from the near zero mark.
Adjourning today, the FED’s Board of Governor’s failed to do so, in spite of the happy talk about the economy “coming back.”
The FED can’t increase interest rates until housing recovers. Housing can’t recover until jobs recover. Jobs can’t recover until we start growing at the 3% plus a year rate and begin the process of getting some of the 94 million working age Americans who are out of the work force back into the work force. That can’t happen until we reverse the formation rate of new businesses, currently shrinking, not growing.
The truth is that the American economy is between a rock and hard place. And our leaders – both Democrat and Republican – seem just fine with that.
