We could be in for a long recession — something like 36 months dating from December 2007, according to some economists. But not if you ask Ben Bernanke. And 60 Minutes did.
According to Bernanke, there is a possibility that the recession could end in 2009. Additionally, over the weekend the G20 summit came out with promises to do what they could to stimulate the global economy. Between the trillions that the U.S. is spending on economic stimulus, along with the efforts being made around the world, it really is not that surprising of an assertion.
Attempt to instill confidence in the financial markets
Bernanke’s assessment is also linked to a desire to instill confidence in the financial markets. The stock market and other economic indicators rely on confidence and perception. When people feel more optimistic, they are more likely to invest and to buy things and to general help keep the cogs of the economy in proper working order. Fear causes people to stop spending money and investors to try to sell. These are actions that keep us in recession.
Anyway, it will be interesting to see whether Bernanke does manage to provide a shot of confidence for the financial markets. And it will be interesting to see if we really do see a turnaround to the recession toward the end of this year.