Recession Fears: Is the worst really over?

Fear begets fear.

The fifth month of the year brings several things: Spring, graduation, and well, the recession. And for the mean time, the great recession is bound to attach itself to each month of the year 2009. Officials dealing with the problem cannot say when will it end but they urge us to continue holding up against its battering effects. But, is the worst of the economic downturn really over?

It could be, said Thomas F. Cooley, Dean of the NYU Stern School of Business. Cooley organized his finance and economic staff back in November to address what is taking place in the worst financial crisis since the Great Depression.

So for those who want to know the good news, Mr. Cooley said in verbatim: "There are distinct signs of a recovery in the U.S. economy, parts of Europe and elsewhere. There is a definite sense that the worst is over". Isn’t that wonderful to hear? Though the worst is over, the risks ahead remains the same.

Recently, industry gurus foresee of an impending inflation. Business luminaries Warren Buffett, Marc Faber, and Jim Rogers warn that inflation is bound to happen due to the actions made by world leaders all over the world to simulate their economies.

“Governments are printing money everywhere, borrowing stupendous amounts,” Jim Rogers said in an interview with the press. “Throughout history that has led to problems…and it will this time too.”

And just to refresh our memories, inflation, as defined in the Merriam-Webster dictionary, is the continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.

Amidst all the good and bad news about the recession, one thing certainly remains clear: we have to stay optimistic. "What we need today is more optimism and more confidence," said Lawrence Summers, director of the National Economic Council and President Barack Obama’s top economic adviser. "Fear begets fear, and that is the paradox at the heart of the financial crisis," he added.

Fear begets fear…hmm…perhaps we should all ponder on that.

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