Back in August when I wrote about Nouriel Roubini and his warning of a recession “double-dipâ€Â, I never thought that within a few months, I would be writing a similar piece but with President Obama’s name in the headline. I also have to mention comments made by Federal Reserve Bank of St. Louis President James Bullard, who said earlier this morning that the Fed may not start to raise interest rates until early 2012. All in all, not a great day to be long USD.
President Obama said in a Fox interview released this afternoon, that he is concerned that the growing US debt could threaten the fragile recovery and had the potential to “lead to a double-dip recessionâ€Â. At first I thought this was a mistake of some kind – after all, didn’t the Obama administration place Fox News on the “persona non grata†list a few weeks ago?
Be that as it may, the President revealed that the government was considering tax breaks for businesses to promote hiring in the new year. Clearly, the hope is that a boost in employment will provide the stimulus needed to sustain the recovery and enable the government to pare back on its stimulus spending. In fact, the President specifically mentioned the costs associated with the spending programs as one of the main reasons the country’s annual deficit ballooned this year, adding another $1.5 trillion to America’s overall public debt now pegged at more than $12 trillion.
