Tags: us | economy | recession

MBMG's Gambles: Return to Recession is a Sure Thing

Tuesday, 16 Aug 2011 12:05 PM

The United States is definitely going to slide back into a recession and there's nothing anyone can do to stop it, says Paul Gambles, Managing Director of financial advisory and asset management firm MBMG Group.

The United States cannot avoid paring down its debt burden without a fresh economic contraction, which won't be a mere bump in the road, either.

"If you've got a $14.5 trillion debt burden, it's going to be a pretty severe recession," Gambles tells CNBC. "Recession is usually linked to the size of the debt (a country) has to clear up."

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(Getty Images photo)
The United States has been borrowing more than $500 billion a year to create gross domestic product (GDP) growth of a little less than $500 billion a year for years now, Gambles says.

"(When) GDP growth is less than the increase in national debt every year, it just doesn't make sense," Gambles says.

"To us that is not real growth. ... It's just papering over the cracks, it's hiding over the fact that maybe we are already in a serious recession where growth is impacted by the sheer amount of debt that's out there."

Calls for a double-dip recession are on the rise.

A USA Today poll of 39 economists show 30 percent predict a new recession to strike the economy soon, twice as many compared with a similar poll just over three months ago.

Even those who predict the country will avoid double-dipping believe the economy will limp along at best.

"We'll continue on a path of pretty slow and disappointing growth, but probably there's not a decline into recession," says Robert Mellman, senior economist for JPMorgan Chase, according to USA Today.

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The United States is definitely going to slide back into a recession and there's nothing anyone can do to stop it, says Paul Gambles, Managing Director of financial advisory and asset management firm MBMG Group. The United States cannot avoid paring down its debt burden...
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2011-05-16
Tuesday, 16 Aug 2011 12:05 PM
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