Tags: double | dip | Robert | Heller

Former Fed Gov. Heller: Double Dip Recession in Cards

By    |   Friday, 05 Mar 2010 09:42 AM

The economy is headed back down, thanks to the exploding budget deficit, which will send interest rates soaring, says former Federal Reserve Gov. Robert Heller.

“A double dip recession is still very much in the cards,” he says.

“The big elephant in the room that nobody talks about is the huge federal deficit, and that will eventually force up interest rates,” Heller told CNBC.

The deficit totaled $1.4 trillion last year and is expected to register about the same amount this year.

“As interest rates go up, it will kill both the business and consumer recovery,” Heller said.

“Therefore, the economy is likely to go down again. Sooner or later we’ll see a spike in interest rates, and that’s the danger awaiting investors.”

Heller’s not the only one expecting trouble.

Sen. Judd Gregg, R-N.H., says the United States is on course for economic disaster, thanks to the exploding deficit and debt burden.

Already, he notes that China has announced its reluctance to keep financing the deficit.

"That is probably a smart decision on their part," Gregg told the Financial Times. "The warning signs are pretty clear, and the path is unsustainable.”

So how will all of this play out?

“We haven’t faced up to the crisis which is impending, which is the financial meltdown of our nation due to excessive debt,” Gregg said.

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The economy is headed back down, thanks to the exploding budget deficit, which will send interest rates soaring, says former Federal Reserve Gov. Robert Heller. A double dip recession is still very much in the cards, he says. The big elephant in the room that nobody...
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2010-42-05
Friday, 05 Mar 2010 09:42 AM
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