`2 Could High Food & Fuel Prices Trigger Another Recession?

Could High Food & Fuel Prices Trigger Another Recession?

on Apr 24, 2011 in Fox News, Media Center by Ed Butowsky | No Comments »



Ed Butowsky, Managing Partner of Chapwood Capital Investment Management, joins Fox News to discuss the potential economic impact of higher price of goods like food and fuel. Could the US economy be heading for another recession?

There are new concerns that high gas and food prices could potentially drive the US economy into another recession. The average price of a gallon of gas has risen for the past 31 straight days to $3.86. Some of the year over year cost increases in food are:

  • Ground beef up 21%
  • Butter up 33%
  • Milk up 10%
  • Coffee up %30
    • Are these prices a sign of our economy reaching a tipping point for another recession? Ed Butowsky explains that the economy is entering a very dangerous situation – called Stagflation. The fundamental concern many are having is that if the economy continues in this direction that we will not just have a recession but a very steep recession.

      A recession is traditionally indicative of 2 successive quarters of negative GDP growth, and the typical means of combating a recession is to lower taxes to help stimulate the economy. When the economy rises too fast than the fed raises interest rates to slow it down. The problem that exists today with the US economy is that we are experiencing high unemployment, very slow economic growth, and rising prices of goods in this country which all translates to stagflation. This is a very dangerous situation and unfortunately requires drastic measures by this administration to alleviate this condition.

      There are many who believe this economy is like a car chasing a bullet train (price of goods). While this administration has not figured out how and what to do to help, it is thought by many that lowering taxes would be the only way to stimulate the economy.

      As many people adjust their family budgets and how they spend their money, JP Morgan recently cut their 2011 GDP growth estimates from 2.5% to 1.4%. This is a dramatic re-adjustment in their expectation of the economy and all due to rising cost of gas and food among other things in this country.

      A word about Ed Butowsky:

      Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.

      Check out some of our other articles:

       



      Tags: , , , , , , , , , , , , , , ,

Leave a Reply

About Ed

Ed Butowsky is a nationally-recognized expert in investment management. Butowsky has been in the financial services industry for over 25 years. He was previously a Senior Vice President at Morgan Stanley and a Managing Director ... More »

Contact

Ed Butowsky, Managing Partner
Chapwood Capital Investment Management, LLC
Website: www.chapwoodinvestments.com
Email: ed@chapwoodinvestments.com
Phone: (972) 865-2225
1