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James Grant: Strong Recovery Ahead

By    |   Thursday, 01 Oct 2009 09:02 AM

James Grant, the editor of Grant’s Interest Rate Observer predicts the economy will recover quickly.

In fact, the recovery will be “a bit of a barn burner,” Grant wrote in The Wall Street Journal.

“With regard to the recession that precedes the recovery, worse is subsequently better. The deeper the slump, the zippier the recovery,” he said.

Grant said growth increased after the depressions of 1893-94, 1907-08, 1920-21, and even 1929-33.

Also, the value of the dollar is being affected by the actions of the Federal Reserve, he said.

The Fed “maintains this stance of radical ease lest it get the blame for a relapse. However, by driving money market interest rates to zero and by setting all-time American records in money-printing ($1.2 trillion conjured in the past 12 months), the Fed is putting the value of the dollar at risk,” he wrote.

“Its wide-open policy all but begs our foreign creditors to ask the fatal question, ‘What is the dollar, anyway?’”

Many risks remain as the economy recovers slowly, said Christine Cumming, first vice president of the Federal Reserve Bank of New York, at a lecture at Eastern Connecticut State University reported by Reuters.

"It appears that we are at the bottom of the recession, but it seems it won't be the easiest and snappiest recovery ahead of us,” she said.

“We view the risks as still very much skewed to the downside, in other words a lot could still go wrong and we have to be careful."

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James Grant, the editor of Grant’s Interest Rate Observer predicts the economy will recover quickly.In fact, the recovery will be “a bit of a barn burner,” Grant wrote in The Wall Street Journal.“With regard to the recession that precedes the recovery, worse is subsequently...
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2009-02-01
Thursday, 01 Oct 2009 09:02 AM
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