# Is America going back into recession



## techman (22 Oct 2004)

I heard on the news the other day that Intel has cut the price of its chips for the second time because of a build up of inventories. This means that they are not selling as much as they intended. This was the first precursor to the high tech collapse of 2001 "a build up of inventories". At the end of last year it appeared that America was powering its way out of a mild recession led by the high tech companies most notably Intel. Now scarcely a year later they have "a build up of inventories". This is extremely worrying it means that the recovery has stalled and is more than just a "soft patch". I think Alan Greenspan has made a huge mistake he tried to cause a recovery by starting a consumer boom. Basically he has tried to do what worked in the 1990s today. At first this seemed to be working and now it is coming unstuck. He thought that America could consume its way to recovery without tackling the underlying problems of debt and current account deficit. It looks like America and the rest of the anglo saxon world will have to face up to the hard realities of economics you cannot consume on debt indefinitely. At some stage debt has to be repaid which means reduced consumption. Oil prices have now entered the equation and refuse to go away this will also reduce consumption considerably. So I think Alan Greenspans strategy of a consumer led recovery has failed and I think Alan Greenspan will be replaced. If America goes back into recession it will have serious repurcussions for Ireland.


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## Guest (22 Oct 2004)

That's some extrapolation from the fortunes of one company to those of a whole diversified (by industry and geographic region) economy. I'd be more worried about the trillions of dollars of debt that the US Government is has been racking up thatn the fortunes of any single company taken in isolation at the moment.


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