Moscow - Ria Novosti
The U.S. economy is on the brink of a new wave of recession which is likely be suffused with a fresh wave of liquidity as the nation seeks to depreciate its crushing debt with the aid of inflation, analysts say. The U.S. Federal Reserve made two liquidity injections known as Quantitative Easing 1 and 2, following the financial crisis of 2008 which began in the U.S., the world\'s largest economy. The lowering of the U.S. top credit rating of AAA last month by Standard & Poor\'s is a symptom of a fresh recession in the economy, which expanded a feeble 1.4 percent in the first half of the year. \"The U.S. has all the necessary preconditions for a new wave of crisis: first of all, unemployment rates remain uncomfortably high, and, since March this year, this indicator shows a significant negative dynamic,\" Investcafe analyst Anna Bodrova told RIA Novosti. The U.S. unemployment rate stood at 9.1 percent in July, while the level of household savings fell to 5.0 percent from 5.5 percent the previous month. Americans are also reining in their spending, despite a seasonal vacation increase of 0.8 percent last month. \"The real economy is facing a huge debt burden and consumption has naturally began slowing down,\" said Yelena Matrosova, a senior analyst at BDO audit company. Production growth is unlikely in the next few years, she added. \"The economy prospects for the U.S. in the current situation is a gradual suspension of growth, stagnation and recession. Moreover, the U.S. economy may still recover from a period of stagnation with a minimal loss, but it will be very difficult to cope with recessionary conditions for the second time in three years,\" Bodrova said. The markets were cheered last week by Federal Reserve System Chairman Ben Bernanke\'s comments that there was no need yet to launch QE3. However, he promised to return to the issue on September 20 at the next meeting of the Federal Open Market Committee. The regulator is ready to support the U.S. economic growth if necessary, Bernanke said. Analysts say that higher inflation is the only instrument left for the U.S. to ease its $14 trillion debt burden and eliminate the preconditions for recession. Other measures such as boosting consumption or massive investment are not feasible because the world has run out of creditors. \"I believe Bernanke is already thinking about how to speed up inflation in the U.S., at least to 4-5 percent,\" Matrosova said. The U.S. consumer price index stood at 0.5 percent in July. \"But it will be very hard because their debt burden is so huge that I can not even imagine how much money they need to print this time,\" she added. Nordea bank said that leading economic indicators suggested that the world economy is facing a very uncertain period. \"Activity has slowed sharply in both the U.S. and the Euro area, and our baseline scenario now factors in low growth in the \'old world\' over most of the forecast period (now up to and including 2013). It must be emphasized that the risk of a new, but shallow recession in both regions is quite high,\" the bank said. For Russia, a one percent decline of U.S. GDP would translate into a two percent GDP contraction, Renaissance Capital said in a research note. A slowdown of the economy of the U.S., one of the world\'s leading oil importers, may also mean lower demand for energy, while a $15 decline in the price for Brent pushes Russia\'s GDP down by up to 1.2 percent.